Pricing
Food pricing was a sensitive issue in India. An ideal strategy was to focus on customer’s
ability to pay and tap the rich and upper middleclass population in India. Although
McDonald’s strategy was to increase sales volumes by making products available at
affordable price, its products were perceived to be expensive. The company outlets in Delhi
and Mumbai initially were opened due to the increased affordability of people with western
exposure and brand recognition factors in metros. Additionally, people in the metros were
open to experiment with variety of foods. Absorption of newer cultures was faster in the
Metros than other areas.
The mass markets in India were price sensitive.The positive factors were the growth in
consumer markets with rapid growth in disposable incomes, development of modern urban
lifestyles and the demand for valuexi.