Tradition Vs Innovation with McDonald’s Arvind R P
How well is your brand balancing tradition and innovation?
Move too fast and you might leave people behind; move too slow and your brand will fall behind.
Meet Arvind R P, Chief Marketing Officer, McDonald’s India (W&S), a marketer with a unique perspective managing global brands in the Indian market. Discover how he’s making McDonald’s relevant for millions of people across the country.
Marketing a global brand in diverse markets presents a unique set of challenges. Balancing the need for global consistency with the necessity of local relevance means understanding and adapting to cultural nuances, consumer preferences, and local market dynamics while maintaining the core identity of the brand.
The concept of "glocal" – blending global standards with local preferences – is central to the approach of McDonalds India. Clever menu adaptation, localised marketing strategies and conscientious brand-building means McDonald's India is strongly integrated into Indian culture – but in a market this large, and this fast, Arvind isn’t taking it for granted.
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Credits
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The CMO Show Production Team
Producer - Kate Elks
Audio Engineers – Ed Cheng & Daniel Marr
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Transcript:
Mark Jones
One of the biggest challenges we have in marketing is siloed thinking. We get really caught in our little space. We love to think about marketing as a discipline in and of itself, but there's also a great reminder here about thinking a little bit beyond your professional boundaries. How well do you understand sales? How well do you understand product development, innovation, other parts of the organisation that maybe you haven't spent enough time around?
Hello and welcome to the CMO Show. My name is Mark Jones and it's so great to have you with us. Today, we are going to talk about McDonald's India and the CMO, Arvind, is with me to talk about his experience working at an incredible international brand and how it's being localised, or they call it glocal, so geographically local, but also part of this big thing and being able to adapt on the fly. There's an interesting, I think if you like, a bit of tension between big picture, long-term strategy and really being responsive to the experience of consumers on the fly. And if you've been to India, you know the place, it moves quick, there's a lot going on, and so he really does have his work cut out for him. Let's take a listen to Arvind and the story of McDonald's India.
Thank you for joining us.
Arvind
Thank you, Mark. Thanks for having me on the show.
Mark Jones
You're welcome. I'm really interested to learn about your experience and the culture that surrounds McDonald's in India. In Australia, we call it Maccas, so I'm going to get to the important stuff first, which is, describe the culture around McDonald's. How has it become an important part of the landscape?
Arvind
Well, I think McDonald's has done this very well market after market, and that's one of the reasons it's such a large globally successful brand. The playbook revolves around curating a menu which is relevant for the local market, yet quintessentially McDonald's. But apart from that, it's about marketing playing a central role in building the brand in a way that's culturally relevant and building various occasions over a period of time. It boils down to creating happy memories among your consumers, right? Some people call it nostalgia. Consumers recall, with a lot of fondness, their moments at McDonald's, be it their birthdays, be it their treat after their first job, and so on and so forth. So we are in the business of creating memories and McDonald's has created a lot in India.
Mark Jones
So you would describe the McDonald's brand in India as happiness. What other words would you use to describe the way that you've adapted a US brand for your market?
Arvind
Definitely happiness, fun, familiar, and easily accessible.
Mark Jones
I saw a great ad that you made and it had a whole, it was almost like a party or a family environment where the takeout had been brought in. And do you want to just describe that to us because I'm interested in creating a bit more of a picture of the experiences you celebrate?
Arvind
Sure. At the heart of the McDonald's playbook in India is families and over time, we have created delightful moments for the families. I think the ad that you referred to is one of our campaigns on meals make families, where over time, the family moments come together with the McDonald's at their home. I think we celebrated all those moments over a period of time, be it festivals or, for that matter, regular meal moments. One of the insights, Mark, goes that even at home, even during the weekend, the family is scattered. Everyone is onto their own thing. The teen is in his room studying or gaming, the mother of the household is busy, making sure everything is working fine, and the father is somewhere there catching up on news or television. What brings them all together? And one of those moments is a McDonald's meals family moment. So how can we bring those moments to life in a fun, memorable way? And more importantly, do it consistently over a period of time? So, yeah-
Mark Jones
Now I know you're a fan of the Ehrenberg-Bass Institute and I ask that to get a sense of the data that has gone into that insight. Tell me a little bit about what you've done to do that, to really get a handle on what sounds like a very simple idea, but I'm sure there's a lot behind it.
Arvind
Sure. Sure. Right. Sure. Yes, and you're right. I think over the past five years, I've made it my business to learn what I can from the work that the institute puts out, and I was lucky enough to do a course with them recently. So in the end, it boils down to improving your mental and physical availability. There are many parts of those two paradigms, mental and physical availability. Talking about mental availability, your distinctive assets. McDonald's as a brand has a large library of distinctive assets, but some of those assets play more of a role in the marketeer's mind rather than the consumer's mind. So understanding what are those distinctive assets that really play a role? What are the assets you want to invest on? I think Professor Jenni Romanek gave a very nice framework to kind of evaluate that. The Golden Arches is one such distinctive asset and we put all our might behind it. There are others, of course, including Happy Meals, which is a ritual for kids in that age group.
The other part of the mental availability is understanding the category entry points. So the one that I talked about a few minutes back of festivals is a huge category entry point because festivals, and there are many, many festivals on the Indian calendar, and those festivals are for everyone to gather around. There are special moments there, memories are created, and when we go to those festivals, be it Republic Day, Independence Day, or even at Diwali and Dussehra, which are typical Indian festivals, we sell a lot of burgers on those days and arguably, the brand is already relevant for a whole lot of customers during those occasions. So, a lot of our insight work revolved around understanding those category entry points, the role of the brand in that moment, what should we do to make it the first brand in the consumer's mind whenever that occasion pops up.
The other such occasion I would say is your highways. The government in India is investing a lot to create highways between cities and whenever you want to drop in to a restaurant on the highway, our drive-thrus are top of mind. So depending on the various category entry points, how do you make sure the brand is well positioned and is the first brand to come when the consumer has that need? I think these are some of the principles we apply consistently and in all of this, Mark, you would understand consistency is key, right? Sometimes we marketeers are accused of going to the next new shiny thing and abandoning some of the well laid out principles of marketing. So, discipline becomes very important in doing some of these things.
Mark Jones
Yes, and you've been talking about some very traditional or fundamental marketing techniques and I really appreciate that. We began by speaking about localising effectively a US brand. I think what's interesting to me is the sheer scale and diversity of India. We have huge differences between the north and the south, obviously east and west, and then right within the country. And I think outside looking in, it's very hard, not just here in Australia, but around the world, to really understand the scale of those differences. So, what's involved in creating a brand that can be universally appealing to a billion plus people? At the same time, do you need to localise in very careful ways across the country? Can you give us a sense of what it's like to work in that sort of environment?
Arvind
Sure. Sure. I think we internalise it as something that we call glocal, global plus local playbook. Heart of that playbook, of course, lies our menu. A lot of foundational work happened the initial years of McDonald's. McDonald's in India is about 28 years old and getting the menu right, so be it the famous, in India, McAloo Tikki, which is inspired by Vada Pav, which is already a very traditional food item available in Mumbai and parts of Maharashtra, the province. So, McAloo Tikki is an inspiration on the Vada Pav and we have made it our own and it's one of the largest selling burgers in the QSR landscape in India. So that's a very good example of local familiarity, but quintessentially McDonald's, right?
The other example is a global fan-favourite, the Mac, right? Of course, we can't sell beef in India, so we have the Maharaja Mac, which is a take-off they call the Big Mac, but in chicken avatar and vegetarian avatar. So that's another example how global favourites have come into India, but transformed as it's coming to India, but still retaining the McDonald's-ness, if you will.
The other example is coffee. Coffee is about a decade old in India, McCafe. I know McCafe is very big in Australia too, but cracking the palate in a way that's familiar to the Indian consumer and his or her palate was a lot of work that the team did. So there's a whole host of work on the menu to make it relevant.
Then we come to marketing, right? Very important for marketers to imagine the brand in the context of the local culture. While it's a global brand, global marketing principles, but some of the examples we discussed on family, how can we really imagine the brand and reimagine the brand in local culture? And once you do it over a bit of time and there are examples around the globe of countries who have done that, McDonald's over time becomes just a seamless part of the local culture. So those are some of the things that go behind making the glocal playbook work.
Mark Jones
I really like that. And just to quickly go back to the coffee, because that's important to me, are you saying that the Indian taste for coffee is better or worse than the Australian?
Arvind
It's different. It's different. I am not getting into controversial topics, but it's-
Mark Jones
It's different flavour. That's fine.
Arvind
Different flavour. For example, Mark, there are many markets around the globe which are espresso-based coffees, right? In India, it's a milk-based coffee with sugar. That's a predominant format of coffee. So there are some of the essential differences, I would say. And barista made coffee works a lot in India. So those are some of the essential differences I would say. And flavour profiles are slightly different.
Mark Jones
Yes, I love that. Thank you. Well, tell me a little bit about your background, because you've worked obviously at a number of places over the years, one of which was Levi's back in the day. And I'm curious to know, what is it about your previous experiences that you find yourself really appreciating? What has really set you up for success in this current role?
Arvind
So, two or three things from my past experience really helps me at McDonald's. One is retail experience. You mentioned Levi's. So, like Levi's, I have been in a few retail brands. Ultimately the moment of truth at McDonald's happens in the restaurant and the restaurant experience, everything comes alive or it doesn't. So, understanding that for a marketer is so important and how the marketer can design those experiences and get inspired from those experience to do more of the marketing work. So that retail perspective is really, I think, foundational for a brand like McDonald's.
The other one is, of course, I have been lucky enough to work on wonderful companies like Britannia, Marico, which have built great brands in India, brands that last, brands that are loved by consumers and recalled with a lot of fondness. So, that sets me up for a brand like McDonald's very, very well. Like I said, I believe we are in the business of storytelling, we are in the business of creating memorable moments. So that's, I would say, the second part of it.
But having said that, Mark, I should say that I learned very early in my career not to, what I would call as cut, copy, paste marketing. Every category is different, every brand is different, so marketeers should be very wary of deploying the same tactics that might have gotten them a lot of success in the past and applying them a little bit mindlessly in the current context because like I said, every category and brand is different. So I would add that rider to whatever I have said.
Mark Jones
I appreciate that. Well, you mentioned Marico, which is a foundation I understand, and Kaya, which is a beauty brand.
Arvind
Yes.
Mark Jones
It's interesting to me that in your career you have experienced working with either large or iconic brands. Can you tell me what are the advantages or the positives, but also the challenges? And the reason I ask is some marketers might find the restrictions in place by a global organisation to be difficult. You can't completely tear up the brand book and start again. There's a way of working within these large organisations. Clearly you understand this very well and I'm interested, what does it take to make that work?
Arvind
Right. Well, at the outset, Mark, I think when we talk about large companies and brands that have built businesses over decades, I think the first thing the marketeer needs to understand that he's sitting on the shoulder of giants. A lot of fantastic people in the past have created these brands and how do you take the legacy forward? I think that's the first context one needs to keep in mind. There's a lot of literature out there that a lot of damage is done when CMOs change, when agencies change because at its core, there are successful brands and it's about continuity, it's about doing things better. Yes, it's also about reimagining, but within the boundaries of something that's been built over a period of time. So I would say a small company or large company, I think it's good for marketeers to remember that.
Coming to well-established large companies, yes, definitely there are boundaries. And I can understand when you say that many marketeers feel that, are these boundaries restrictive? But I would say, well, some companies I can imagine probably have much narrower boundaries and give less degrees of freedom to marketeers in various geographies. Thankfully in the context of Levi's and now in McDonald's, those boundaries are pretty large and there is ample space for marketeers to make a difference, to build brands in the local culture. And that's the reason these brands are so successful over time and have proven themselves in multiple countries, in multiple cultures precisely because, while there are boundaries, it's large boundaries, marketeers are given enough degrees of freedom to do marketing stuff, consumer inciting, relevance building, and all of that stuff. So, I feel enriched by these experiences and I learn every day.
Mark Jones
I really love that and I love the idea that you've got the humility to look back and say, "Where have we come from and where are we going?" There's a continuity of story that we are shaping here, which I think is a really great reminder. Now, tell me about AI and digital. We obviously have to talk about your technology approach. What are you doing in terms of digital transformation and the work that you're doing to stay engaged with customers?
Arvind
Like you said, Mark, in today's context, digital is the heart of everything. And I would like to call it data and digital because you need to get your data strategy right, you need to get the digital strategy right, and many times both of them need to work in tandem. Well, we have been a bit ahead of the curve as far as digital goes. We had our own McDelivery app about more than 10 years back, and delivery has only grown over time, more so post COVID where the food delivery market really grew. But we grew in tandem. We are one of the dominant brands in the food delivery space. Yes, apart from McDelivery, we have the food aggregators, the local food aggregators, Zomato and Swiggy, but we work very closely with them, we invest a lot in retail media to make sure our market share in the food delivery space is quite significant.
The other one is in restaurant design and experiences. We have our self-ordering kiosks. Significant amount of orders from consumers within the restaurants are actually made at the self-ordering kiosks. The consumers love it, it's a pure digital experience. They're able to customise their order the way the traditional way of ordering cannot, or has limitations. More than 70% of business today is digital, Mark, and we have come a long way, but we are also aware that there are many more new digital journeys that will get created as the digital medium really becomes more and more sophisticated. For example, in the larger context today in India, quick commerce, which is a 10-minute, 15-minute delivery is quite the rage. Consumer adoption is huge and it'll have implications in food delivery also. So we are quite cognizant that what it is today and what it could be tomorrow could be very different and how can we be ahead of the curve, do a lot of experiments, pilots to make sure we are not caught-
Mark Jones
If we think about quick commerce that you mentioned, and the image that sprang to mind for me just then was maybe more stores more locally located, closer to people because of that very short time window. That's an assumption. But in that dynamic, we are talking about an even tighter integration between product development, the store experience, and then the digital marketing. So what does that look like? What are you thinking about in terms of how to enable that with your colleagues? Because that's fun, but it also sounds complicated.
Arvind
Very, very challenging, but we are up to the task, Mark. So in terms of restaurant design, for example, if riders have to come in and get out quickly because the whole proposition for the consumer is 10 minute delivery, how can we really enable that?
So how do they just pick up their orders in a jiffy and get on to their business? But moving into the kitchen, how do we make it simple from a menu perspective to assemble, get the products right? So there's a huge implication in terms of menu design so that it doesn't take the whole time to just make the food product in the first place. So simplifying it from a supply chain perspective, simplifying it from the kitchen perspective, from a menu design perspective, those are very, very important things. And finally, living up to the promise. I would say that quick commerce is made for food delivery because quicker the food reaches, the better is experience, and better is a chance of you coming back and McDonald's with this robust processes is actually very well placed to tap the quick delivery, quick commerce.
Mark Jones
So I have so many questions about this, but I want to know, I had in my mind a scooter drive-thru only for example, right? No cars, only scooters going through. But to the point of marketing though, what do you think is going to be your most powerful contribution to that entire experience that you just explained to us?
Arvind
So, I think right from discovery, so call it physical availability. Whenever those quick commerce apps are open and when the search happens, how can the brand be right there? I think that's so important. While it sounds very simple and sounds very foundational, getting it right day in, day out is quite the challenge. And then making sure the right products are there. While we have a vast menu, a relevant menu, but making sure the right menu is there for quick commerce, which can live up to that promise of 10-minute delivery. And then fulfilment, where my colleagues in operations come in to make sure when the product is ready, how can we make sure that the rider of the aggregator, for example, in this context comes, the food is ready as soon as the rider is there at the restaurant. We don't keep the rider waiting for example.
And finally, closing the whole loop in terms of experience. Consumers have a lot to say on the experience, whether appreciative or otherwise. And I think as these new channels explore, very important to keep our ears to the ground, what is the consumer saying? He or she, is he happy or not? What can we do to improve? I think that closing the funnel is so, so important in the early days. So keeping a close eye on consumer ratings, experience, just to make sure we get it right the next time, or better the next time-
Mark Jones
Obviously we speak a lot about consumer experience, customer experience, and hyper personalization, particularly at scale in your case. Clearly that's got to be a big part of your thinking. So how can you get to know these customers better, be aware that maybe they were very happy last time, this time, not so much, how do we adjust? Those sorts of dynamics.
Arvind
Yes. Yes.
Mark Jones
And again, we are talking at scale here. There are a lot of people doing this every single day. So, explain what that's like from your perspective.
Arvind
Absolutely. I think what this needs is systems perspective and solutions needs to be system-wide rather than very specific or something that can't be scaled up doesn't really work. I'll give an example, right? How to get the packaging right for delivery. Now, a part of the consumer feedback is inevitably on packaging. Did they get the food warm? Were the beverages in place? Was there any spill? Right? Yes, we may or may not control the entire experience, but it's a brand's responsibility to make that happen.
So, a lot of work, for example, happened on packaging, Mark, especially post-COVID when the delivery sales really went up, we had to invest a lot of time and effort making sure the packaging of the burger, the beverage, the entire delivery bag is right, so that consumer experiences are A1. And we had to improve the packaging. We had introduced a new packaging for our beverages to make sure they don't spill, for example, and so on, so forth. New packaging for our fries, our iconic fries, so that they remain crispy-
Mark Jones
And warm.
Arvind
And warm. Exactly right. So I can imagine the number of interventions were done on packaging and it's resulted improvement on consumer ratings over a period of time, but it's a journey, Mark, with every new product we launch.
Mark Jones
Well, when you think about future trends, we've only really talked about technology a little bit, and what I'm reflecting on is just how much focus is on the consumer, on the culture, the environment in which you're focused. I'm interested what emerging trends you think will be important for you in that context?
Arvind
The search for experiences, especially the newer generation, call it Gen Alpha or Gen Z, they are looking at things differently. They want to invest on new experiences, experiences that they treasure, experience that they find meaningful. For example, there's a whole gaming generation out there, and so they're looking for experiences on similar lines, if you will. So while as a restaurant brand, we are well-placed to deliver on the experiences, I would give an example of what we did around the anime meal campaign last year where we actually redid many of our stores into anime hotspots and reimagined them like a anime fan would do. So everything in the restaurant is completely anime inspired design, and the anime enthusiasts loved it. So some of those authentic experiences I think are going to be very, very important.
Mark Jones
So you really have to be very careful about how they feel, right? The emotional engagement with the brand across all of these channels, that seems to be top of mind for you.
Arvind
Absolutely. Absolutely. Well, in the past, I would say maybe just advertising would do the trick in some of these things, but now you need advertising and, as we call it, acts, right? So acts stand for all of those experiences. How do you bring it alive? How do you make it tangible? And so, advertising plus acts has been our mantra for quite some time, to make it real authentic for consumer-
Mark Jones
What is the challenge with measurement of that activity?
Arvind
Well ultimately, it boils down to measurement, right? And I'm a big fan of the whole evolving field of measurement, and I think what we tend to focus on is making sure we not only get attribution right, attribution admittedly has been overemphasised in the digital context, but it's not just attribution, but it's also about incrementality. What initiatives are giving you incrementality over the baseline? We have adopted market mix modelling over time. It's a global best practise within the McDonald's system, and that gives us a bird's eye view of what media choices give you the best incrementality, what initiatives give you the best incrementality? Is it a value initiative? Is it a menu initiative? And so on and so forth. So ultimately, it really helps the CMOs to have a reasoned discussion with both the CEOs and the CFOs in terms of investing behind the right things, but also making sure that the CMOs deliver on incremental business growth over a period of time. So, that's something that's really helped chart our course here.
Mark Jones
In wrapping up, if I can share a reflection with you, there's two contrasting ideas that perhaps neatly sum up my experience in India. One is that there's a sense of continuity and a long-term story that we spoke about, and so that feels a bit more calm. And then we spoke about this ten-minute hyper experience of scooters running around everybody and everybody's on the hustle and going super, super fast. It's like these two speeds, right? Is that kind of what it's like? You have to spin between big picture, long-term, strategic thinker and then like, "Let's go. Come on people." I don't understand how you do that at the same time.
Arvind
Yes. Definitely. I think carrying on the legacy, at the same time, embracing the disruption, right? And under such disruptions is payments. Over the past few years, Indians have really embraced digital payments, what we call a UPI, which is so big compared to credit cards and so on and so forth. So there are disruptions that are happening on a regular basis, largely the data and digital domain, but even otherwise. So, it's a challenge for marketeers and I would say a great opportunity, if you will, to be abreast, to keep your ear to the ground, make sure when there's next disruption, you are well placed, not caught unawares, you are doing this quick small pilots, as we call it, to make sure you are either finding that disruption works for you or you move on to the next pilot. While at the same time making sure the high quality, long-term brand building happens. The latter creates long-term equity, it creates a business for tomorrow, while riding the distributions, the disruptions make sure that you're getting it right as far as the next value proposition goes for the Indian consumer.
Mark Jones
Wow, that's great. And to your point, being able to switch between those different modes of thinking, I think, would be the key. Well, Arvind, it has been a pleasure speaking with you.
Arvind
Absolutely.
Mark Jones
Thank you for sharing your story, being so open about how you are helping the McDonald's brand to grow, and plenty of great insights. Again, thank you for your time.
Arvind
Thank you, Mark. Thank you for having me on the CMO Show. It's been an absolute pleasure.
Mark Jones
Well, I really hope you enjoyed my conversation with Arvind, and one of the takeaways for me is a reminder that good old-fashioned brand building still really matters. When we are building these organisations, these brands, these customer bases that we want to last for a long time, you've got to keep your focus. We don't need to change everything every couple of years when we get a new CMO, but at the same time, he reminded us that we've got to stay relevant, we've got to stay connected to our customers, we've got to be thinking about that experience that extends right through the product mix, through the packaging, through all the advertising, and then of course through every part of the organisation. So it's busy, there's a lot going on, but it's really at the heart of what it means to be a modern marketer.
So, I hope you've taken lots of notes, taken a lot away from his experience. And that's it for today's episode. My name is Mark Jones and it's been a pleasure to be your host. The CMO Show is a podcast brought to you by ImpactInstitute in partnership with Adobe. Thanks for joining us. We'll see you next time.