Clown becomes King: The Indian Food Chain Story

I was at terminal IGI T3 and had enough time to gaze at the outlets, the Vango Musket was welcoming me for a South Indian Meal, a KFC LED Display and the Big M from Mc Donald’s were trying to lure me. No matter whichever American food chain I see and no matter how many times these different brands remind me of eating something my first response is always to search for an Mc Donald’s (being a vegetarian was maybe at my childhood, but now it is more of a preference and I don’t have a very structured explanation to that). Let’s accept the fact KFC puts a better and spicier sauce in all their burgers but still, I search for an Mc D and KFC gets the deal only and only in absence of an Mc D. The last option to try is Dunkin Donuts for me. I may have given a try to Mr. Sub or some other less known outlet than Dunkin itself. It is present in our lives for the last 7 years, even I am even baffled to know that Oyo is newer to Dunkin. Dunkin’s is been there for quite some time and it has earned very less in terms of brand value in the Indian market.

I am deeply moved by the performance of Dunkin donuts in India not because it has failed but because it is controlled by the same board which governs Baskin Robbins, Domino’s and no one can doubt their success in India. What makes Mc Donald’s so successful and Dunkin’s struggles for footfall even after being in the same serving space is a matter of concern. After digging deeper I found that Mc Donald’s initiated the process to test the viability of expansion in India in the early ’90s. It navigated the restrictions of FDI through a JV between Connaught Plaza Hotels for East and North India and Hard castle Restaurant for West and South. The new Industrial Policy Implemented in 1991 opened doors for many organizations. Mc Donald’s was one of them. Mc Donald’s did a four-year-long market validation research and found various insights that worked as the pillars for the development of one of the giant chains in the Indian restaurant Industry. Mc Donald knew from day zero that 50% of Indians are vegetarians and they will not like any restaurant to put beef and pork in their plates. It was sure that Indians will also not like the concept of veg and non-veg being prepared at the same slab. There was a religious sentiment attached to it and Mc Donald’s solved the problem through innovation. Mc Donald’s localized the menu and segregated the preparation slabs both for the veg and the non-veg meals. In research, it was found that people eat only 3 meals outside their house out of every 100 and Mc Donald’s had to take it to at least 15 for its profitability and survival. The generation previous to the millennial is very price sensitive. These are the same people who have experienced the socio-economic problems India faced during the early 70s and mid-80s. These are conservative class people and have more rigid religious beliefs. Mc Donald’s tapped on this nerve very well, it divided its strategy into two parts BA and BCV. The aim of BA (Brand Affordability) was to make the product available at a price that goes well with the value. Mc Donald’s started its Aloo Tikki burger at 25 only and strategically brought it down to 20 as the brand visibility increased. By the implementation of BA, the eating out rate went up by ten times. Mc Donald’s projected itself as a pocket-friendly family place. To drive its sales further Mc Donald’s added a Happy Meal at just rupees 25 with toys. Mc Donald’s works on JIT philosophy to reduce its cost. It has identified the emotional quotient correctly to project itself as a loyal Indian family restaurant which serves all the age groups. 

It was the first restaurant chain to have a kitchen tour program; a customer can register himself as a member of the inspection team. This made Mc Donald’s a transparent and people-friendly organization.

On the contrary, Dunkin established itself on the shoulders of Domino’s and Baskin Robbins what it lacked from the beginning was that the necessary homework. Though Jubliant is there in the market for two decades. They have served either dessert to the couples or served pizzas to the group of friends or delivered food to couple up with the beer. Serving breakfast has never been a forte for Jubliant. They just severely ignored this fact that why on earth a typical Indian will go out to have a sweetened donut that too flavored as Kesar badam and Soan Papdi. Despite having a sweet tooth it is too hard to find a person who loves Soan Papdi as the first thing in the morning. Let’s face the truth that there was a time when Soan Papdi was liked by many but the over gifted Diwali box has made things horrible. Now the great sales figures which may have been considered to choose a localized flavor for India but the company would have not taken the surge of festivals into account. Haldiram and Bikano would have also not made their sales figure public.  This shows very poor market research hypotheses. The Dunkin Donuts looks more like a café which does not go very well with the QSR as Café has an innate expression of relaxation while breakfast serving places should have more like grab and go ambiance.

Again whenever start from Delhi don’t sell coffee as an only beverage. Delhi has memories of Mughals and British Colonial Era and both the eras were not a great fan of Coffee. However, Dunkin sells more coffee when compared to any other brand like Costa, Barista, Starbucks and Mc Donald’s but it fails to replicate the model in India. A sweetened food with a Coffee is the last thing any Indian would dream for. The aspect that Indians prefer to start their day by a home-cooked meal is also not strange and the marketing team could not establish this fact on time. It took too long for Dunkin and Jubliant to react when they saw that Indians have just considered it as a Pastry shop.

Dunkin also offered 10 local versions of burgers which is also overwhelming for Indians. This recalls the famous Subway experience, there are very few people who like the experience of choosing all the ingredients and at last everyone regrets their decision. Psychological experiments have also proven this repeatedly that when given fewer choices the customers have rated a higher satisfaction level. The electronics giant Apple follows this principle religiously too. How Dunkin could not figure this out is a very strange thing to understand. Dunkin failed to understand the concept of complete and healthy Indian breakfast.

It can be concluded easily that Dunkin blindly followed Mc Donald’s when it had to pivot. It applied very fewer efforts to make its own strategy and copying the strategy of the 90s applied by Mc D proved wrong for them. Dunkin did not consider the fact it is too hard to mess with the behavior and eating habits of the Indians. One has to find space like sand in gravels if it wants to fit and succeed. There was also a lot of confusion as to what Dunkin wanted to become. It's the brand name itself had a name Donut attached to it and it is very hard to find donuts fans here in India. As repeatedly shared to sustain and flourish in India the companies should try to find a place to fit in. There is a low possibility of behavioral change in India. However, the game is still not over for Dunkin it must start small and tweak its menu, offerings and its work time to match with the sentiment and mood of the Indian population. The company has to bend itself before expecting Indians to even move a little. Innovation and localization are the key factors, it must also not overdo things by selling Rajma Rice bowl, thorough market research is needed before executing any strategy. The Dunkin may have to do away with the breakfast provider thought before executing newer strategies. The road to success is still available Dunkin should understand the great Indian Cuisine and it must have a detailed roadmap, it should also shift the gears faster to reach the destination.