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MASTER OF INTERNATIONAL BUSINESS, DELHI SCHOOL OF ECONOMICS

EXPANSION OF TACO

BELL(US based Mexican

fast food chain) IN THE

INDIAN MARKET

POOJA DADLANI Roll no.-48

8/4/2013

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Undertaking

I hereby give a formal undertaking, in writing that the research design

that I have prepared here, is in pursuance of an academic study being

given to us by our faculty. It is solely for academic purpose to complete

the course.

I also undertake to certify, to the best of my knowledge, the genuineness

of the sources mentioned in the report design.

Pooja Dadlani

Roll no.-48

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Acknowledgements

The following research project “EXPANSION OF TACO BELL(US based Mexican fast food

chain) IN THE INDIAN MARKET” was successfully completed under the guidance of Prof. S

R Khanna, Lecturer, Department of Commerce, Delhi University.

I also thank my group members & friends for their valuable suggestions, comments and criti-

cism. They have been welcoming enough to provide me with all the required help that has ena-

bled me to make this project a success.

POOJA DADLANI

Roll no. 48

MIB 2012-2014

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EXECUTIVE SUMMARY

The research design proposed here aims to devise a market research plan for Taco Bell (a US

based fast food chain) to enter Indian fast food industry. This research design includes the esti-

mated cost analysis of primary and secondary research to be conducted by the company before

entering into Indian market along with that country analysis and the potential in Indian food in-

dustry has been theoretically analyzed. Taco Bell has opened two outlets in Bangalore in South

India. The research here aims at the strategy that should be adopted by this fast food company to

penetrate into the Indian market to a large extent.

The foray of multinational fast food retailers into India has impacted the taste buds of Indian

consumers significantly. Instant food is scoring over traditional food due to influence of Western

countries, and rise in income & subsequent standard of living, convenience, etc. As a result, fast

food menus are gaining wider acceptance from the Indian consumer. The Indian fast Food Indus-

try has witnessed high growth strides in the past years, with increasing disposable income; expo-

sure to a number of cuisines; and consumers‘ willingness to experiment a mix of both Western

and local menu. It has not only provided convenience to people who shuttle between home and

work for a bigger part of the day but also eliminated the requirement of conventional cutlery.

This industry at the moment thrives on international appeal endorsed by niche chains. The devel-

opment of nutritious and healthier replacements for the traditional servings at fast food restau-

rants has transformed into mass promotion of portable foods. As per a new research report titled

‗Indian Fast Food Market Analysis‘, currently the Indian fast food industry stands at a massive

size of ` 47 billion, driven by a growing number of working professionals and increasing west-

ernization. Apart from this, busy life schedule, standardized food, and less time-consuming pro-

cesses are also fuelling the demand from domestic consumers in the industry. As demand for all

types of fast food items are consistently on the rise, pizza, burger, and French fries have become

the all time favorite among young Indians, more so with some of the well-known burger and piz-

za restaurants like McDonald‘s, Domino‘s, KFC, Pizza Hut, Nirula‘s etc, operating in INDIA.

Being a subsidiary of YUM Brands that has well developed fast food joints like KFC and PIZZA

HUT in India, Taco Bell has good potential to be successful in the Indian food industry. Using

the expertise and experience that these brands have, Taco Bell should be able to use resources

well and expand in the right markets.

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TABLE OF CONTENTS

TOPIC PAGE NO

1. Executive summary 4

2. Objectives of the Study 6

3. Research methodology 7

4. Financial and time budget 9

5. Sample questionnaire 11

6. Analysis of target country- India 14

7. Entry strategies for foreign investors 17

8. Fast food industry 21

9. Indian food service industry 24

10. Fast food industry in India 26

11. Taco Bell- History and background 33

12. SWOT analysis 36

13.Selection of taco bell to expand in the Indian market 40

14. Porter‘s five forces 44

15. Marketing mix 45

16. Taco bell in the Indian market 49

17. Results 50

18. References 51

LIST OF GRAPHS

Graph no. Page no.

1. India imports 16

2. India food service industry market size 24

3. India food service industry segments 25

4. India food service industry organised sector 25

5. Growth of Qsr‘s in India 26

6. Growth of urban population 29

7. Comparison of fast food chains worldwide 42

8. Yum International 43

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OBJECTIVES

To devise a market research plan for expansion of Taco Bell in Indian Food market that

has two outlets operating in Bangalore along with cost estimates of primary and sec-

ondary research.

To study marketing adopted by Taco Bell in other countries.

To analyse the current Food service industry in India

To find the factors those have been drivers for the growth of this industry.

Make suitable suggestions and recommendation for Taco Bell before expanding into

Indian market.

METHODOLOGY

Conduct a survey targeting urban population going to Quick Service Restaurants, online

and in person asking their responses to analyse their fast food consumption pattern.

Interviews with Resource Persons actively involved in the operations of other fast food

chains in India.

Collect and analyse secondary data collected through internet, etc.

SAMPLING DESIGN

The Population of the study will consist of:

People visiting Quick service restaurants often, mainly urban population

Resource Persons actively involved in the operations of other fast food chains in India.

.

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RESEARCH METHODLOGY

The system of collecting data for research projects is known as research methodology. The data

may be collected for either theoretical or practical research for example management research

may be strategically conceptualized along with operational planning methods and change man-

agement.

Some important factors in research methodology include validity of research data, Ethics and the

reliability of measures most of your work is finished by the time you finish the analysis of your

data. Market research provides relevant data to help solve marketing challenges that a business

will most likely face--an integral part of the business planning process. In fact, strategies such as

market segmentation (identifying specific groups within a market) and product differentiation

(creating an identity for a product or service that separates it from those of the competitors) are

impossible to develop without market research. Market research involved here in the project falls

into two categories:

(1) Secondary Research

(2) Primary Research

SECONDARY RESEARCH

Secondary research uses outside information assembled by government agencies, industry and

trade associations, labour unions, media sources, chambers of commerce, and so on. It's usually

published in pamphlets, newsletters, trade publications, magazines, and newspapers. Secondary

sources include Public sources, Commercial sources and Educational institutions. This portion of

research can be completed by keeping these issues in mind:

Growth trends in Indian food service today.

Increase in the size of my target market

Demographic profile of my target customer

Factors that influence the customer‘s choice to eat at a certain QSR

New eating trends

Competition from other players in Indian Fast food market

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Collect and analyse secondary data collected through internet, etc about Taco bell and the In-

dian fast food industry.

PRIMARY RESEARCH

Primary research involves collecting original data about the preferences, buying habits, opinions

and attitudes of current or prospective customers. These Include:

Surveys

Questionnaires

Direct mail, telephone, or personal interviews.

Feedback forms

Conduct a survey of urban population going to Fast Food Restaurants (online and in per-

son) asking their fast food consumption pattern.

Interviews with Resource Persons involved in the operations of other fast food chains in

India.

After analyzing the secondary data obtained, Primary data collected and how much money we

are willing to spend will determine which techniques we should choose for our research.

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FINANCIAL AND TIME BUDGET

Cost of desk Work:

Collection of Online Questionnaires and feedback forms through emails and social media net-

working sites

Cost of conducting email responses from 50 consumers per location - Rs. 5,000(approx)

(Cost of Opening an account on an online forum for collecting responses, generating the email

leads of the Target Consumers)

Cost of data collection from fast food outlets:

Collection of responses and feedback forms from the resource persons at various QSRs in differ-

ent locations

Cost of making phone calls and visiting various resource persons involved in fast food joints‘ op-

erations: Rs. 10,000(approx)

Cost of fieldwork

A market research of consumers in the age group of 10-70 will be conducted in the following

cities –Delhi, Hyderabad, Kolkata, Chennai.

25 retailers in the four cities each would be covered for the research work- Delhi, Hyderabad,

Kolkata, Chennai

Cost estimates to conduct this survey by sending personnel from Delhi is as follows:

Travel Charges: Flight Ticket (To other 3 cities) – Rs 4,000 Approx. per person per flight

Accommodation: Hotel Room (single) – Rs. 2000/Night

Food: Rs.1000 per day per member

Miscellaneous

Roughly Rs 500 per day per member

Conducting the research would take 12 days considering the team consists of 4 members.

Thus, investment required= (4000*2*4 +3500*4*12)

=Rs. 2,00,000

Cost of reports

(a)INDIAN FAST FOOD MARKET ANALYSIS -Available for Rs. 41,250 ($750)

(http://www.rncos.com/Report/IM264.htm)

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(b) FAST FOOD MARKET IN INDIA- Available for: Rs.49500 ($900)

(http://www.bharatbook.com/food-market-research-reports/fast-food-market-in-india.html)

Time estimates:

Time estimate for doing the field work in other cities : 12 days

Time estimate for collecting the data through phone and emails : 5 days

Time estimate for doing the desk work, with various reports and analysing the secondary

data : 5 days

Time estimated for Analyzing the data : 5 Days

Total time estimated for Project: 27 days

COST RELEVANT TO PROJECT

1. Cost of fieldwork – Rs 2,00,000

2. Cost of desk work- Rs 30,000

3. Cost of reports - Rs 90,750

Total cost of Project –Rs 320,750

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SAMPLE QUESTIONAIRE

Q1. How often do you visit a fast food joint?

Daily

Weekly

Fortnightly

Monthly

Q2. What amount of money do you spend on each of your visits to a fast food restaurant?

100-200

200-500

Above 500

Q3. What is more important for you while deciding which restaurant to visit?

Brand image

Easy accessibility

Special offer

Q4.What time of the day do you generally visit a fast food joint?

Morning

Afternoon

Evening

Q5. You prefer a store due to friendliness of staff?

Strongly disagree

Disagree

Neutral

Agree

Strongly agree

Q6. Preference of store due the variety of menu available in the store

Strongly disagree

Disagree

Neutral

Agree

Strongly agree

Q7. Preference of store due the service speed

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Strongly disagree

Disagree

Neutral

Agree

Strongly agree

Q8. Preference of store due to good calorie content exist in the food

Strongly disagree

Disagree

Neutral

Agree

Strongly agree

Q9. Preference of store due to the cleanliness and store atmosphere

Strongly disagree

Disagree

Neutral

Agree

Strongly agree

Q10. Preference store due the delivery speed offer by the store

Strongly disagree

Disagree

Neutral

Agree

Strongly agree

Q11. Satisfaction with the menu offer for my family

Strongly disagree

Disagree

Neutral

Agree

Strongly agree

Q12. Preference of store due to easy accessibility and locational advantage

Strongly disagree

Disagree

Neutral

Agree

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Strongly agree

Q13. advertising strategy

Strongly disagree

Disagree

Neutral

Agree

Strongly agree

Q14. preference of store due to special offer and discounts

Strongly disagree

Disagree

Neutral

Agree

Strongly agree

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THEORITICAL ANALYSIS

ANALYSIS OF THE TARGET COUNTRY

INDIAN BUSINESS ENVIRONMENT

Business in today‘s world is a complex undertaking if not steered through a proper channel and

an accurate approach. In the recent past, India has evolved as an exciting business opportunity,

with extreme amount of potential and support for many thriving global giants like Google, Face-

book, GE, HSBC and Microsoft. With countless number of quality English speakers, it has be-

come the norm of the day to set up business process outsourcing in the Indian subcontinent. It is

astonishing to note the boom in IT industry in such a short span of five years with Hyderabad

turning as a major IT hub for many young professionals.

Apart from the giant business ventures, India is steadily offering excellent marketing trends to

small and medium size businesses. Fast food restaurants are growing rapidly and are making big

buck easily. It has become a great option for entrepreneurs who are in a spur to make quick mon-

ey in their own convenient hours with the luxury of being one‘s own boss. Any person with a

good amount of expertise, passion, commitment and confidence can venture out into a successful

entrepreneurship provided he is backed by all the necessary capital and employee strength. The

risks of any new business can be weighed by studying the pros and cons through Internet on a

regular basis. This enables one to get a real feel of the current market condition of any particular

product and its user response. Newer marketing approaches with catchy selling ideas are in

vogue with the middle class.

However, it is not a herculean task to set up a business such as a software company in India as it

is recognised as a huge technology outsourcing ground for many Indian and foreign nationals.

Cost savings are the main focus with many intellectual professionals working for a much lower

costs than their foreign counterparts

Business Environment is the world around a company over which it has no direct control. It co-

vers many dimensions impacting a company's activities & performance. It is an aggregate of all

forces & factors external to the business enterprise, but which influence it's functioning. There is

a mutual inter-dependence between business and its environment. A business enterprise is an

open system and it continously interacts with its environment. Businesses take inputs like raw

material, capital, labour, energy, etc. from the environment, and transform them into goods &

services, and then send them back into the environment. Interaction between business and envi-

ronment is in various ways such as: exchange of information, resources, influence & power.

There are several layers of influences surrounding a business. The outermost layer, called the

macro-environment, consists of dimensions that impact almost all companies in an economy.

These factors are the six aspects of business environment -

Political, Economical, Social, Technological, Environmental, & Legal.

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Political environment includes factors like a country's political system, type of government, cen-

tre-state relations, public opinion, law & order, nature of government policies towards business -

particularly those related to taxation, industrial relations, regulation of business & industry, and

foreign trade regulations. It also relates to the stability of the government in power, the risk of

major political disturbances, or threats from anti-social elements, terrorists or other countries.

.

Economic environment relates to the general condition of the economy within which a business

operates. It comprises of the factors and forces concerned with means of production and distribu-

tion of wealth. It refers to the nature of economic system, economic policies of the country, or-

ganisation of capital & money markets, GDP, income level, growth rate, inflation rate, interest

rates, money supply, and unemployment rate. The Indian economy is currently the 9th largest in

the world by nominal GDP and the 4th largest by purchasing power parity (PPP). Economic

growth rates are projected at around 7.5%-8% for the financial year 2011-2012. Economic Lib-

eralisation was when India adopted free market principles and it included opening India for in-

ternational trade and investment, deregulation, initiation of privatisation, tax reforms and infla-

tion-controlling measures. The fruits of liberalisation reached their peak in the year 2007 as India

reached its highest GDP growth rate of 9%. With this India became the 2nd fastest growing

economy in the world, next only to China.

Socio-cultural environment covers factors such as social customs, traditions, culture, lifestyle,

attitude of people, saving & spending patterns, size of population, demographic profile, educa-

tion level, occupational structure, trade unions, and other factors that influence and describe the

behavioural characteristics typical of the people. It would also include the Corporate Social Re-

sponsibility initiatives undertaken by companies.

Technological dimension covers the nature of technology available and used by an economy. It

also covers the extent to which development in technologies are likely to take place. This may be

reflected in factors like expenditure on R&D and rate of obsolescence.

Technical obsolescence occurs when a new product or technology supersedes the old, and it be-

comes preferred to utilize the new technology in place of the old. Some examples of technologi-

cal obsolescence are telephone replacing the telegraph, and DVD replacing VCR. Products are

becoming obsolete and getting replaced by newer versions. Not many people will remember the

days of the floppy disk. Computers are becoming smaller but faster, and TVs are becoming

sleeker with more features in India.

Environmental factor refers to the physical or geographical environment affecting the business. It

also includes the considerations like environmental pollution, climate change, carbon footprint,

etc.

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Legal or regulatory dimension describes the framework of legislation impacting business. It in-

cludes all the laws, legal system and judicial system of the country. A business has to work with-

in the framework of a country's laws and regulations. Laws important to business relate to areas

like monopolies & restrictive trade, consumer protection, employment, industrial relations,

health & safety, and joint stock companies.

Graph 1- INDIA imports

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Entry strategies for foreign investor starting opera-

tions in india

A foreign company planning to set up business operations in India has the following options

AS AN INDIAN COMPANY

A foreign company can commence operations in India by incorporating a company under the

Companies Act,1956 through

Joint Ventures; or

Wholly Owned Subsidiaries

Foreign equity in such Indian companies can be up to 100% depending on the requirements of

the investor, subject to equity caps in respect of the area of activities under the Foreign Direct

Investment (FDI) policy. Details of the FDI policy, sectoral equity caps & procedures can be

obtained from Department of Industrial Policy & Promotion, Government of India

(http://www.dipp.nic.in ).

Foreign Companies can set up their operations in India by forging strategic alliances with Indian

partners.

Joint Venture may entail the following advantages for a foreign investor:

Established distribution/ marketing set up of the Indian partner

Available financial resource of the Indian partners

Established contacts of the Indian partners which help smoothen the process of setting up of op-

erations

Wholly Owned Subsidiary Company

Foreign companies can also to set up wholly-owned subsidiary in sectors where 100% foreign

direct investment is permitted under the FDI policy.

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Incorporation of Company

For registration and incorporation, an application has to be filed with Registrar of Companies

(ROC). Once a company has been duly registered and incorporated as an Indian company, it is

subject to Indian laws and regulations as applicable to other domestic Indian companies.

For details please visit the website of Department of Company Affairs under Ministry of Finance

athttp://dca.nic.in

AS A FOREIGN COMPANY

Foreign Companies can set up their operations in India through

Liaison Office/Representative Office

Project Office

Branch Office

Such offices can undertake any permitted activities. Companies have to register themselves with

Registrar of Companies (ROC) within 30 days of setting up a place of business in India.

Liaison Office/Representative Office

Liaison office acts as a channel of communication between the principal place of business or

head office and entities in India. Liaison office can not undertake any commercial activity di-

rectly or indirectly and can not, therefore, earn any income in India. Its role is limited to col-

lecting information about possible market opportunities and providing information about the

company and its products to prospective Indian customers. It can promote export/import from/to

India and also facilitate technical/financial collaboration between parent company and companies

in India.

Approval for establishing a liaison office in India is granted by Reserve Bank of India (RBI).

Project Office

Foreign Companies planning to execute specific projects in India can set up temporary pro-

ject/site offices in India. RBI has now granted general permission to foreign entities to estab-

lish Project Offices subject to specified conditions. Such offices can not undertake or carry on

any activity other than the activity relating and incidental to execution of the project. Project Of-

fices may remit outside India the surplus of the project on its completion, general permission for

which has been granted by the RBI.

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Branch Office

Foreign companies engaged in manufacturing and trading activities abroad are allowed to

set up Branch Offices in India for the following purposes:

(i) Export/Import of goods

(ii) Rendering professional or consultancy services

(iii) Carrying out research work, in which the parent company is engaged.

(iv) Promoting technical or financial collaborations between Indian companies and parent or

overseas group company.

(v) Representing the parent company in India and acting as buying/selling agents

in India.

(vi) Rendering services in Information Technology and development of software

in India.

(vii)Rendering technical support to the products supplied by the parent/ group compa-

nies.

(viii) Foreign airline/shipping company.

A branch office is not allowed to carry out manufacturing activities on its own but is permitted to

subcontract these to an Indian manufacturer. Branch Offices established with the approval of

RBI, may remit outside India profit of the branch, net of applicable Indian taxes and subject to

RBI guidelines Permission for setting up branch offices is granted by the Reserve Bank of India

(RBI).

Branch Office on ―Stand Alone Basis‖

Such Branch Offices would be isolated and restricted to the Special Economic zone (SEZ) alone

and no business activity/transaction will be allowed outside the SEZs in India, which include

branches/subsidiaries of its parent office in India.

No approval shall be necessary from RBI for a company to establish a branch/unit in SEZs to

undertake manufacturing and service activities subject to specified conditions.

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Application for setting up Liaison Office/ Project Office/ Branch Office may be submitted in

form FNC 1 (available at RBI website at www.rbi.org.in )

FOREIGN DIRECT INVESTMENT (FDI) POLICY

FDI under automatic route is now allowed in all sectors, including the services sector, except a

few sectors where the existing and notified sectoral policy does not permit FDI beyond a ceiling

Automatic Route

No prior approval is required for FDI under the Automatic Route. Only information to the RBI

within 30days of inward remittances or issue of shares to Non Residents is required. RBI has

prescribed a new form, Form FC-GPR (instead of earlier FC-RBI) for reporting shares issued to

the Foreign Investors by an Indian company.

Government Approval

Foreign Investment proposed not covered under the ‗Automatic Route‘ are considered for

Governmental Approval on the recommendations of the Foreign Investment Promotion Board

(FIPB)

Foreign Investors Non Resident Indians

Application for such cases are to be

submitted in FC/IL form or on plain

paper to Foreign Investment Promo-

tion Board (FIPB) in Department of

Economic Affairs, Ministry of Fi-

nance, Government of India North

Block, New Delhi 110 001.

Non Resident Indians are required to

submit their proposals to the Secretar-

iat for Industrial Assistance (SIA) De-

partment of Industrial Policy and

Promotion, Government of India for

consideration of FIPB.

TAXATION IN INDIA

India is moving towards reforming its tax policies and systems so as to facilitate globalization of

economic activities. The corporate tax rate for foreign companies is 40%. The net tax rate is far

lower than this on account of various deductions and exemptions available under the tax laws.

Tax holidays are available in Special Economic Zones set up to make industry globally competi-

tive. Infrastructure Sector Projects enjoy special tax treatment/holidays.

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FAST FOOD INDUSTRY

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 packaged

form for take-out/take-away.

Outlets may be stands or kiosks, which may provide no shelter or seating, or fast food restaurants

(also known as quick service restaurants). Franchise operations which are part of restaurant

chains have standardized foodstuffs shipped to each restaurant from central locations.

The capital requirements involved in opening up a fast food restaurant are relatively low. Restau-

rants with much higher sit-in ratios, where customers tend to sit and have their orders brought to

them in a seemingly more upscale atmosphere may be known in some areas as fast casual restau-

rants.

The Start of Fast Food Culture

The concept of fast food pops up during 1920s.The 1950s first witnessed their rapid prolifera-

tion. Several factors that contributed to this explosive growth in 50‘s were:

(1) America‘s love affair with the automobiles.

(2) The construction of a major new highway system.

(3) The development of sub-urban communities.

(4) The baby boom subsequent to world war second.

―Fast-food chains initially catered to automobile owners in suburbia.

On the go

Fast food outlets are take-away or take-out providers, often with a "drive-through" service which

allows customers to order and pick up food from their cars; but most also have a seating area in

which customers can eat the food on the premises. People eat there more than five times a week

and often, one or more of those five times is at a fast food restaurant.

Nearly from its inception, fast food has been designed to be eaten "on the go", often does not re-

quire traditional cutlery, and is eaten as a finger food. Common menu items at fast food outlets

include fish and chips, sandwiches, pitas, hamburgers, fried chicken, French fries, chicken nug-

gets, tacos, pizza, hot dogs, and ice cream, although many fast food restaurants offer "slower"

foods like chili, mashed potatoes, and salads.

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Variants

Although fast food often brings to mind traditional American fast food such as hamburgers and

fries, there are many other forms of fast food that enjoy widespread popularity in the West.

Chinese takeaways/takeout restaurants are particularly popular. They normally offer a wide vari-

ety of Asian food which has normally been fried. Most options are some form of noodles, rice,

or meat.

Sushi has seen rapidly rising popularity in recent times. A form of fast food created in Japan. su-

shi is normally cold sticky rice served with raw fish.Pizza is a common fast food category in the

United States, with chains such as Domino's Pizza, Sbarro and Pizza Hut. Menus are more lim-

ited and standardized than in traditional pizzerias, and pizza delivery, often with a time commit-

ment, is offered.

Fish and chip shops are a form of fast food popular in the United Kingdom, Australia and New

Zealand. Fish is battered and then deep fried.The Dutch have their own types of fast food. A

Dutch fast food meal often consists of a portion of French fries .

Business

In the United States alone, consumers spent about US$110 billion on fast food in 2000 (which

increased from US$6 billion in 1970). The National Restaurant Association forecasted that fast

food restaurants in the U.S. would reach US$142 billion in sales in 2006, a 5% increase over

2005. In comparison, the full-service restaurant segment of the food industry is expected to gen-

erate $173 billion in sales.

Jobs and labor issues

Today, more than 10 million workers are employed in the areas of food preparation and food

servicing including fast food in the world.

Employees are the backbone of the fast food industry. Proper training is crucial to the orderly

and quick service customers expect. Yet, employee turnover can be as high as 200% per year.

With such a turnover, owner-operators of franchise and non-franchise restaurants have the daunt-

ing task of constantly training an entirely new workforce. Policies and procedures need to be ex-

plained to each new employee.

Globalization

In 2006, the global fast food market grew by 4.8% and reached a value of 102.4 billion and a

volume of 80.3 billion transactions. In India alone the fast food industry is growing by 40% a

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year. McDonald's is located in 120 countries and on 6 continents and operates over 31,000 res-

taurants worldwide.

KFC is located in 25 countries. Subway has 29,186 restaurants located in 86 countries, Pizza Hut

is located in 26 countries, Taco Bell has 278 restaurants located in 12 countries besides the Unit-

ed States.

Health issue

Tran‘s fats which are commonly found in fast food have been shown in many tests to have a

negative health effect on the body.

The fast food consumption has been shown to increase calorie intake, promote weight gain, and

elevate risk for diabetes. The Centers for Disease Control and Prevention ranked obesity as the

number one health threat for Americans in 2004. It is the second leading cause of preventable

death in the United States and results in 400,000 deaths each year.

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INDIAN FOOD SERVICE INDUSTRY

The size of the Indian food industry estimated at US$ 200 bn in the year 2006-07, is estimated to

reach US$ 300 bn by 2015. The food service industry has two distinct sectors - the organized

segment and the unorganized segment. The food services industry in India was estimated to be

worth Rs. 580 bn in 2008, out of which Rs. 80 bn, or 7.24%, was accounted for by the organized

sector. It is estimated that the consumer food services value sales grew by 20% in 2008 over

2007. Dhabas and roadside eateries comprising street stalls are the most common forms of res-

taurants and have traditionally addressed eating out requirements of Indians. The organized

foods services segment is characterized by accounting transparency, organized supply chain with

quality control and sourcing norms, and multiple outlets.

INDIA FOOD SERVICE INDUSTRY MARKET SIZE

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INDIA FOOD SERVICE INDUSTRY INDIA FOOD SERVICE INDUSTRY ORGANISED

SEGMENTS SECTOR

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FAST FOOD INDUSTRY IN INDIA

GROWTH OF QSR’S IN INDIA

INDIA – EMERGING MARKET FOR GLOBAL PLAYERS

The percentage share held by foodservice of total consumer expenditure on food has increased

from a very low base to stand at 2.6% in 2001. Eating at home remains very much ingrained in

Indian culture and changes in eating habits are very slow moving with barriers to eating out en-

trenched in certain sectors of Indian society.. The growth in nuclear families, particularly in ur-

ban 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.

FACTS AND FIGURES

Fast food is one of the world‘s largest growing food type. India‘s fast food industry is growing

by 40% a year and is expected to generate a billion dollars in sales by 2005.The multinational

segment of Indian fast food industry is up to Rs. 6 billion, a figure expected to zoom to Rs.70

billion by 2005. By 2005, the value of Indian dairy products is expected to be Rs.1, 00,000 mil-

lion. In last 6 years, foreign investment in this sector stood at Rs. 3600 million which is about

one-fourth of total investment made in this sector. Because of the availability of raw material for

fast food, Global chains are flooding into the country.

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Major players in fast food are:

MCDONALDS

KFC

PIZZA HUT

DOMINOS PIZZA.

COFFEE DAY

BARISTA.

The main reason behind the success of the multinational chains is their expertise in product de-

velopment, sourcing practices, quality standards, service levels and standardized operating pro-

cedures in their restaurants, a strength that they have developed over years of experience around

the world. The home grown chains have in the past few years of competition with the MNCs,

learnt a few things but there is still a lot of scope for improvement.

REASON FOR EMERGENCE

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Gender Roles: 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 hold

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 disposa-

ble income. Now people have more disposable income so they can spend easily in fast

food and other activities.

Working Women: working women 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 gen-

der roles. They do not want to confine themselves to household work and upbringing of

children‘s.

Large and growing urban 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, Hin-

dus avoid all foods that are believed to inhibit physical and spiritual development. Eating meat is

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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 influ-

ences 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 to-

gether. 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 im-

pure 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 cul-

tural 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 recy-

cled, or even worse, merely thrown on the ground. This burdens nature unnecessarily and squan-

ders 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 in-

creases (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 envi-

ronment friendly products. But associated with this issue is the problem that fast food player fac-

es - 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 socie-

ty‘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 stand-

ard back, thereby making it a arm wrestling and mind boggling exercise.

Health related issues: obesity:

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I. Studies have shown that a typical fast food has very high density and food with high den-

sity causes people to eat more then they usually need. \

II. Low calories food: Emphasis is now more on low calorie food. In this line McDonald has

a plan to introduce all white meat chicken Mcnuugget 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 of the market. They are in-

troducing 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 arose from the changes in our living conditions:

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.

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TACO BELL- HISTORY AND BACKGROUND

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Taco Bell was founded by Glen Bell who first opened a hot dog stand called Bell‘s Drive-In

in San Bernardino, California in 1946 when he was 23 years old. Six years later, he sold the stand

and opened a new one two years later, this time selling tacos under the name of Taco-Tia. Over

the next few years Bell owned and operated a number of restaurants in southern California in-

cluding four called El Taco. Bell sold the El Tacos to his partner and built the first Taco Bell

in Downey in 1962. In 1962, he sold Taco-Tia. Kermit Becky, a former Los Angeles police of-

ficer, bought the first Taco Bell franchise from Glen Bell in 1964, and located it in Torrance. The

company grew rapidly, and by 1967, the 100th restaurant opened at 400 South Brookhurst

in Anaheim. In 1970, Taco Bell went public with 325 restaurants. In 1978, PepsiCo purchased

Taco Bell from Glen Bell.

In 1991, Taco Bell opened the first Taco Bell Express in San Francisco. This concept is a re-

duced-size restaurant with a limited menu (primarily items priced under $1), meant to emphasize

volume. Taco Bell Express locations operate primarily inside convenience stores, truck stops,

shopping malls, and airports.

Taco Bell began co-branding with KFC in 1995, when the first such co-brand opened in Clayton,

North Carolina. The chain has since co-branded withPizza Hut and Long John Silver's as well.

In 1997, PepsiCo experimented with a new "fresh grill" concept, opening at least one Border

Bell restaurant in Mountain View, California on El Camino Real. In addition to a subset of the

regular Taco Bell menu, Border Bell offered Mexican-inspired items like those available

from Chevys Fresh Mex restaurants (then owned by PepsiCo), such as Chevys signature sweet

corn tamalito pudding and a fresh salsa bar. Close to the time that PepsiCo spun off its restaurant

business in 1997, the Border Bell in Mountain View was closed and converted to a Taco Bell

restaurant, which is still open as of 2012.

Dispute with the Coalition of Immokalee Workers

In March 2005, the Coalition of Immokalee Workers (CIW) won a landmark victory in its na-

tional boycott of Taco Bell for human rights. Taco Bell agreed to meet all of the coalition's de-

mands to improve wages and working conditions for Florida tomato pickers in its supply chain.

After four years of a tenacious and growing boycott, Taco Bell and Yum! Brands agreed to make

an agreement called the CIW-Yum agreement with representatives of CIW at Yum! Brands head-

quarters. The CIW-Yum agreement set several precedents, establishing:

The first direct, ongoing payment by a fast-food industry leader to farm workers in its supply

chain to address substandard farm-labor wages (nearly doubling the percentage of the final

retail price that goes to the workers who pick the produce).

The first enforceable Code of Conduct for agricultural suppliers in the fast-food industry

(which includes the CIW, a worker-based organization, as part of the investigative body for

monitoring worker complaints).

Market incentives for agricultural suppliers willing to respect their workers‘ human rights,

even when those rights are not guaranteed by law;

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Full transparency for Taco Bell‘s tomato purchases in Florida; the agreement commits Taco

Bell to buy only from Florida growers who agree to the pass-through and to document and

monitor the pass-through, providing complete records of Taco Bell‘s Florida tomato pur-

chases and growers‘ wage records to the CIW.

Taco bell has opened two outlets in Bangalore and one outlet in Mumbai. Taking into account

the huge fast food market in India, Taco Bell should expand to other tier 1 and tier 2 cities. The

operations of the company are studied and feasibility in the Indian market is analyzed.

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SWOT ANALYSIS

Strengths

Taco Bell is an established brand in USA with more than 5600 outlets. It has the re-

sources and the expertise at its disposal to create a strong brand image for itself in the In-

dian market despite all the challenges that this market poses.

Taco Bell is a subsidiary of Yum! Restaurants, which also owns Pizza Hut and KFC.

These two have more than 200 outlets between them in India. The experience of KFC and

Pizza Hut will definitely hold Taco Bell in good stead and prevent it from making the

same mistakes these two made. The success of any fast food chain depends on how it

manages its supply chain and from where it sources it raw materials. Due to the experi-

ence of the Indian market with its other two brands, YUM! definitely has an edge in this

regard.

Taco Bell contributes around 66% of Yum Brands‘ profits globally and surely will get all

the support from the parent company.

The attractive pricing (Rs 18- 79) will make sure that a large number of consumers try

out Taco Bell.

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Goodwill and reputation: The company certainly has earned a good name and reputation by its previous

products and services in the market. It is even more recognised in other markets outside India, where the

company is among the leading fast food giants. The brand is recognised and trusted in India for its quality

products, price, and customer service. It therefore has a good head start and enjoys a good chance of be-

coming a leader in Indian fast food industry.

Adopted a healthy trans-fat free formula which is a key competitive advantage over other compet-

itors who has not yet switched to the healthier recipes.

Weaknesses

There is not much awareness about Mexican food in India. Tacos , burritos, quesadillas

and the other offerings are virtually unheard of. Well there‘s a huge board inside the

Bangalore outlet which has descriptions about the food items( and thankfully their pro-

nunciations too).However, they will certainly have to do more if they want to create in-

terest about their products and penetrate into the Indian market.

It does not have a exceptional variety of Desserts. Presence of irresistible desserts defi-

nitely attracts the children, who nowadays have an important say and a big spending

power.

It becomes really difficult to make genuine fans with people being preoccupied mouth-

watering cheese burst pizzas and chicken buckets.

Also, in the US most of Taco Bell‘s items contain beef. Beef is not popular in India and

they haven‘t introduced it here. They have introduced vegetarian items with paneer, pota-

to and beans as fillings but they will definitely have to be more innovative because vege-

tarians comprise a huge market in India, unlike the US and can‘t be ignored.

For most Indian families, eating out means eating grand. However, Taco Bell‘s products

are far from that. In their own words, a tortilla resembles a chappati and as a friend point-

ed out, a taco looks like a rolled masala papad. So it‘s highly impossible that TACO

BELL will become that extravagant weekend family eating out place.

Lost goodwill when some of customers were hospitalized due to traces of E.coli bacteria.

Opportunities

With the boom in IT and other industries, the disposable income of Indians has exponen-

tially increased. People have started eating out more often and India‘s $13 billion fast-

food market is already growing 25-30 percent a year. With such a huge and growing

market, the timing of Taco Bell‘s entry is perfect.

Taco Bell has a huge opportunity to position itself as a healthy eating joint. Apart from

the regular offerings, it could offer a healthy low calorie menu. If it has to take on the

market leader McDonalds, the ―healthy‖ card seems to be the most realistic option. The

only other international joint offering healthy option is Subway. However, Subway is

priced at around Rs 100 onwards and doesn‘t really target the mass market. Taco bell

could really fill this gap of being a healthy and affordable offering. More and more Indi-

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ans are becoming health conscious and ingredients like lettuce and beans that TB uses in

its products will be an attractive proposition for this health conscious young crowd.

Taco Bell has a unique concept of unlimited refills of the entire Pepsi soft drinks range

for Rs 35 called Freefills. Small things like these will help the chain to get the attention of

the Indian consumers.

New Markets: Globalisation has opened doors for new markets for the company. As the developed mar-

kets are mostly saturated, the developing countries like India and China promises a good market and gen-

eration of demand in the future. With more than 70% of the markets in india being unexplored and un or-

ganised, KFC has a good scope of expanding its operations in the country.

Cross Culture: Generally there is a good acceptance of American culture of fast food in India. People are

opening up to fast foods more regularly in their daily lives and not just keeping it a once in a month affair.

Thus Indian mindset is fast changing.

Large Youth population: India has a very large share of youth population a compared to other countries.

More than 60% of the population is under the age of 30yrs. As the young generation are more open to fast

foods and demand it more, this is a good news for the company

Introduce home delivery

New flavors and new recipes specially focused on health friendly ingredients can be in-

troduced.

Threats

Chains like McDonalds are very well entrenched in the Indian market and have a good

share of the consumer‘s mind as well as the wallet. While launching their first store in

Bangalore back in march 2010, Taco Bell had a strategy to penetrate the market with its

low cost products ( with a range of 18 -79 rs ), a strategy somewhat similar to McDon-

alds.

However apart from low cost offerings, McDonalds had made other marketing master-

strokes like targeting kids with happy meals and toys. It understood the Indian market

well and time and again came up with innovations in its menu. Even after becoming a

market leader, it continues to introduce new offerings to stay relevant to the consumers

like the recent introduction of McFlurry..

International coffee chains like Starbucks, in association with Tata Coffee and Dunkin

Donuts, in association with Jubilant foods (owner of dominos pizza) will set up shop in

India soon. Though these chains won‘t be a direct threat to Taco Bell, with the presence

of other international brands in the scene, they will have to allocate more resources to

gain the consumer‘s attention.

With the attractive pricing, Taco Bell will definitely make the Indian consumers sit up

and take notice. However, with the kind of products TB is currently offering it will be

very difficult for it to even come close to McDonalds, which has been able to find takers

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across all segments from children to teenagers to families alike. Taco Bell should try to

carve a niche for itself as a healthy affordable outlet.

The creative duties have been moved to Ogilvy. Looking forward to some excellent work

from them as Taco Bell expands its footprint over the country. We will have to wait and

watch whether the Indian consumers will ―think out of the bun‖

Saturated US Market: Now Taco bell cannot rely on just its home market to generate sales. As the US

markets are already saturated and leave no or little scope for growth, company necessarily needs to look at

offshore foreign markets to generate sales and keep up the profits.

New researches and the raised awareness among the public about the harmful health im-

pacts of fast food consumption is a threat to Taco Bell‘s fast food menus.

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SELECTION OF TACO BELL AS A BRAND TOEXPAND IN

THE INDIAN MARKET:

YUM! RESTAURANTS INDIA

Yum! Brands Inc. (NYSE: YUM) is the world's largest fast food company

35,000 restaurants

Present in over 110 countries

Yum! Brands, Inc. global system sales totaled more than $22 billion

Yum! Brands, Inc., is a Fortune 300 company

Yum restaurants include KFC, Pizza Hut, Taco Bell, Long John Silvers (LJS), A&W,

Pasta Bravo, Wing Street, and East Dawning

Yum! Restaurants India became a separately reported division in 2012, underscoring the poten-

tial scale of India as a key emerging market. Together with Yum! China and Yum! Restaurants

International, this important division contributes to our robust international growth.

Today, our India business consists of 280 KFCs and 181 Pizza Hut Casual Dining restaurants

with strong unit growth. KFC is one of the fastest growing quick-service restaurant brands in In-

dia, and Pizza Hut has been ranked as the #1 most trusted food-service brand in India for a sixth

year in a consumer survey by The Economic Times. India also has nearly 130 Pizza Hut Home

Service units. Additionally, Taco Bell has entered India as part of our efforts to develop Taco

Bell into our third international brand.

Our team in India has established a highly successful business model to accelerate aggressive

future growth. We are very excited about our development in the world‘s second largest emerg-

ing market.

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Taco Bell, the American fast food chain which serves Mexican food is the latest international

fast food chain to enter India. It‘s been operating an outlet in Bangalore since more than a year

now. It plans to expand into other major cities and finally into the tier2 towns and cities, with an

aim of setting up 100 outlets in the country by 2015. ―Think Outside the bun‖ the tagline of Taco

Bell takes head on other chains selling burgers. The affordable pricing of its food items makes it

easily accessible to the mass market in India and pits it directly against the Market Leader,

McDonalds. It will be very interesting to see what strategy TACO BELL follows in India and

whether it is able to replicate its success outside USA.

Being a subsidiary of YUM brand, Taco bell will have access to information about the supply

chain, the locations and the taste preferences of the consumers. The customization of the menu

options and the taste of the food offered would be adapted according to the local tastes and pref-

erences. The SWOT analyses of the brand would be done with respect to the Indian food market.

India‘s Fast-Food Market Is Set to Explode—and Yum! Brands Aims to Take the Lead

India has the planet‘s second-biggest population, behind China. Its economy has slowed recently,

but it still grew at an annualized rate of 5.5% in the latest quarter, a rate that‘s still very high by

global standards.

As India‘s economy continues to expand, more of its 1.2 billion people are entering the middle

class. As a result, more of them can afford fast food and other Western conveniences. That rapid

societal shift is expected to fuel a stunning expansion in the country‘s fast food market. Accord-

ing to research firm RNCOS, the industry is set to post a combined annual growth rate of 34% in

India from 2011 to 2014.

At the same time, the presence of major U.S. chains in the country remains rather

weak: Domino‘s Pizza(NYSE: DPZ), which has the largest presence, operates a mere 500 restau-

rants. Yum! Brands (NYSE: YUM), which owns the Taco Bell, KFC and Pizza Hut chains, has

479 outlets, and McDonald‘s is well back with just 271.

All this points to huge growth potential for restaurant stocks that can successfully tap into India‘s

rapidly expanding wealth. And Yum! Brands, in particular, has the international expertise to be a

leader.

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*In thousand

Yum! Brands = 30000 units ( KFC = 11981, PH = 11960 and others)

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PORTERS FIVE FORCES

Market competitors: intensity of rivalry: competition is strong, international chains and typical

Indian fast food restaurants (dominoz, pizza hut, Chinese fast food). There are some Mexican

food restaurants but not standardized. Dominoz has started with Mexican food.

Buyers: bargain power of costumers is strong , due to the various competitors they can choose

from

Suppliers: existing supply chain (KFC – Yum group)

Substitutes: plenty of substitutes product are on the market (pizza,burgers etc.), lack of Mexican

restaurants.

New entrants: the biggest competitors are already on the market, new entrants are not expected,

high initial costs for the international chains. Low entry barriers.

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BRAND POSITION

Taco Bell‘s brand positioning is as follows: ―When you want to step up to the freshest ideas in

fast food, make the bold choice for Taco Bell.‖

Taco Bell‘s tagline is ―Think Outside the Bun‖ Taco Bell strives to distinguish itself from the

overload of fast-food restaurants such as Mac Donalds and Burger King, just to name two. The

tagline is comparable with ‗Thinking outside the BOX‘. This catchphrase has become widely

used within the business environment and refers to looking at a ‗problem‘ from a new perspec-

tive without preconceptions and the so-called tunnel vision.

THE MARKETING MIX

The marketing mix is probably the most famous marketing term. Its elements are the basic, tacti-

cal components of a marketing plan, also knows as the four P‘s. The marketing mix elements are

product, place, price and promotion.

Product

Taco Bell is the nation‘s leading Mexican-style quick service restaurant chain. Taco Bell serves

tacos, burritos, signature Quesadillas, Grilled Stuft Burritos, nachos, and other specialty items

such as the Crunchwrap Supreme, in addition to a wide variety of Big Bell Value Menu items.

fresco style.

In 2003, Taco Bell launched the "fresco style" menu. By ordering something fresco style, the

item's cheese and/or sauce is replaced by the chain's fiesta salsa. Using this option cuts the fat in

the product in half in some cases. In 2008, Taco Bell launched an entire Fresco menu.

Taco Bell serves more than 2 billion consumers each year in more than 5,800 restaurants in the

U.S. In 2005, Taco Bell generated sales of $1.8 billion in company restaurants and $4.4 billion in

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franchise restaurants. More than 80 percent of our restaurants are owned and operated by inde-

pendent franchisees.

International Menu: Burritos:

• Beef $0.99

• Beef Burrito Supreme $2.09

• 2 Beef Burrito Supreme $2.39

• Beef Fiesta Burrito $1.79

• 7 Layer Burrito $1.69

• Grilled Stuffed Beef Burrito $2.59

Tacos:

• Beef $0.89

• Beef Supreme $1.19

• Soft Shell Beef $0.89

• Soft Shell Beef Supreme $1.29

• Soft Shell Chicken Supreme $1.99

• Soft Shell Steak $1.69

• Soft Shell Steak Supreme $1.99

• Double Decker Taco $1.29

• Double Decker Supreme $1.59

Gorditas and Chalupas:

• Beef Baja $1.79

• Beef Supreme $1.79

• Beef Nacho Cheese $1.79

Quesadillas:

• Chicken or Steak $2.89

• Cheese $1.79

Nachos:

• Nachos $0.89

• Nachos Beef Supreme $1.69

• Nachos Bell Grande $2.69

Desserts:

• Twists $0.79

Specialties:

• Beef Enchilada $1.49

• MexiMelt $1.19

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• Beef Pizza $2.89

• Pintos‘n Cheese $0.89

• Mexican Rice $0.89

• Fiesta Taco Salad $4.09

• Border Bowl

Southwest Steak $3.79

Zesty Chicken $3.49

Place

Taco Bell is the #1 Mexican fast-food chain in the US, with more than 5,800 locations. The res-

taurants feature a wide range of Mexican-style menu items including tacos, burritos, gorditas,

quesadillas, and nachos. Taco Bell units can be found operating as free-standing units and as

quick-service kiosks in such places as shopping malls and airports.

Taco Bell serves more than 2 billion consumers each year in more than 5,800 restaurants in the

U.S. Taco Bell currently has over 278 restaurants operating in Canada, Guam, Aruba, Dominican

Republic, Chile, Costa Rica, Guatemala, Puerto Rico, Ecuador, Asia, Europe, and the Philip-

pines.

In 2005, Taco Bell® generated sales of $1.8 billion in company restaurants and $4.4 billion in

franchise restaurants.

Price

In May 2008, a new value meal called Why Pay More Value Menu debuted. This new value

menu contains some of the items from the previous value menu as well as several new ones.

Meals cost79-89-99 cents each.

Promotion

The promotion mix consists of 4 major components which are: advertising, personal selling,

sales promotion and public relations.

In addition to the aforementioned, Taco Bell has several movie production companies as their

promotional partners, amongst other: 20th Century Fox, Disney, Sony Pictures and Paramount.

In addition, Taco Bell has established some partnership contract with major sporting events, for

example the world-famous Superbowl.

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HOW SHOULD TACO BELL EXPAND IN THE INDIAN MAR-

KET:

Alternatives

• Co-brand with existing KFC stores

The first alternative would be to cobrand with KFC. If we explore the pros and cons of

this option, it can be seen that KFC is still just growing so partnering up with it may just

slow down Taco Bell‘s growth. Another thing is that KFC is priced based on the costs of

production, and since the ingredients of it are not readily available in India, they are sold

at a premium and this concept may not work well with taco bell

• Co-brand with existing Pizza Hut stores

Another option would be to co-brand with a well-established chain of Pizza Hut stores,

but then the main problem raised here is the possibility of hurting the already good image

of Pizza Hut.

• Enter as stand-alone Taco Bell stores

Another alternative would be to enter India as a stand-alone brand, that is, as a brand that

is independent of any connections from KFC nor Pizza Hut. Doing this would keep both

KFC and Pizza Hut from any chances of being damaged. Also if its entrance is success-

ful, the future will definitely be brighter. There are some downsides to this, however, as

they will have to start from scratch, thus making it more costly for the corporation as a

whole.

• Not to enter the Indian market

.

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TACO BELL IN THE INDIAN MARKET

• Expand in the Indian market as a stand-alone brand with a menu that is well adapted to

India‘s culture. As Taco Bell has already opened two oulets in Bangalore and one outlet

in mumbai as a stand alone brand, it should penetrate to other metros and tier two cities.

It should also open outlets in malls and SEZs. The menu already has vegetarian options

but more spices should be used to match the taste buds of the indian consumer.

• Menu in India includes a variety of vegetarian and non vegetarian Tacos, Burritos, Sig-

nature Quesadillas, Grilled Stuft Burritos, Nachos, and other specialty items. Taco Bell

also offers several combos to satisfy your craving for Taco Bell food at lunch, snack and

dinner. Hence, a customised menu will surely help taco bell to be a huge success.

• Customisation in the market - Following in the footsteps of McDonald's, beef is off the

menu in this culture-sensitive country. Taco Bell offers chicken instead. Half the menu is

vegetarian, including potato and local cheese (paneer) variations flavoured with Mexican

seasonings and spices. Prices start low: a taco costs 18 rupees and a cheesy tortilla 20 ru-

pees – Almost the same as a dosa or paratha in the street-corner food outlets.

• Marketing strategy with mobile – iPhone app – Shaker: Created by the Hyperfactory,

Taco Bell launched the "Why Pay More Shaker" iPhone application, which calculates the

various 79, 89 and 99 cent items on the restaurant's value menu.To use the app, users just

need to enter the prices of the value menu items they are buying. Then, they have to

shake their phone to trigger calculation.The application is meant to show consumers that

Taco Bell is dedicated to helping consumers save money during this tough

time.Customers with a limited amount of money in hand can enter the amount they have

and the app will show them what combinations of menu items they can afford to buy.The

app also has a store locator link that helps find the nearest Taco Bell.

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RESULTS

1. Expand in the Indian market as a stand-alone brand with a menu that is well adapted to India‘s

culture

2. After analysing Company‘s marketing mix it was observed that Taco Bell will be able to attain

a sustainable growth in Indian fast food market.

3. As the size of the Indian food industry is expected to grow at a huge rate by 2015, it has got a

high potential for investment

4. The total cost of the estimate of market research plan is about INR 320,750.

5. Being a subsidiary of yum brands that already operates pizza hut and KFC in India it would be

easy for taco bell to expand into the Indian market and not repeat the mistakes made by pizza hut

n KFC.

50 | P a g e

REFERENCES:

Books: Marketing Research - Boyd, Westfall and Stasch

International Market Research - C. Samuel Craig and Susan P. Douglas

Online Articles http://www.trefis.com/stock/yum/articles/142595/fast-food-market-in-india-

set-to-explode-yum-brands-aims-to-take-the-lead/2012-09-07

http://www.scribd.com/doc/19018679/fast-food-industry-in-india-a-study

http://www.investmentu.com/2011/March/indias-developing-fast-food-

nation.html

http://www.referenceforbusiness.com/history/St-Th/Taco-Bell-

Corporation.html#b

http://www.financialpundits.com/indian-company.html

http://www.researchandmarkets.com/reports/1246140/indian_fast_food_mark

et_analysis

Reports http://www.bharatbook.com/market-research-reports/food-and-drinks-market-research-

report/indian-fast-food-market-analysis.html

http://www.scribd.com/doc/19018679/fast-food-industry-in-india-a-study