Fast-Food Options in Bangalore - Research Paper Example

Running head: Bangalore- An Attractive Opportunity For a Fast Food Center BANGALORE- AN ATTRACTIVE OPPORTUNITY FOR A FAST FOOD CENTER INTRODUCTION This report contains material which suggests a new location for Wendy's International Inc., to diversify their fast food centers. The report has identified Mahatma Gandhi Road in Bangalore, India as the appropriate location for its business. Fast food centers are usually located on the basis of foot traffic by potential customers in the area, proximity to crowd-pulling or crowd gathering places like museums, theatres etc. The report has taken into account all these factors and more data related with the consumption trends and a proposal has been made on this. The outline of the report basically consists of a brief description of the location, followed by the analysis of consumption trends in the location. This is then followed by a conclusion explaining why Wendy's International Inc., one of the largest fast food chains of the world must consider this location. MAHATMA GANDHI ROAD, BANGALORE M. G. Road is one of the busiest roads in the city of Bangalore and is lined on one side with retail stores, food outlets and restaurants. It runs from Trinity Circle at one end to Anil Kumble Circle at the other. It has many office buildings, shops and theatres. It is also a home to a large number of buildings and banks. An additional point that is worth mentioning here is that, presently, it is being improved and prepared for the long-awaited Metro Rail line that connects the eastern part of Bengaluru with the west. Many Indian cities (including New Delhi and Mumbai) have an M. G. road, and in general there is no linkage between these various roads (except that in many cases, these happen to be the busiest part of the city). FAST FOOD - THE INDIAN SCENARIO India, as the world sees it, is a developing country, showing great progress in its economy. Many MNCs of various industries have turned their attention towards India.The Indian middle class has grown so affluent that they can easily afford to eat out more often compared to a decade ago. In fact, according to a McKinsey report, the Indian food industry grew faster than the information technology industry over the last 10 years. The fast food industry in India is even bigger business. India's fast-food industry is growing by 40% a year and is expected to generate over a billion dollars in sales this year. Consumerism is big business in India. There will be 628 million middle-class Indians by 2015. And already, their net income has doubled over the last 10 years. Every multinational company now wants to sell in India. Some companies have failed and others succeeded. The ones that failed did so because they were not sensitive to the cultural factors that affect consumer behaviour in India. One of the key reasons for the increased consumption is the impressive growth of the middle class. At the start of 1999, the size of the middle class was unofficially estimated at 300 million people, larger than the entire population of the United States. And this figure is expected to grow to 445 million by 2006. A detailed survey undertaken by the economic think tank NCAER provides a quick view on how the proportion of the middle segments (UM or upper middle, M or middle and LM or lower middle) has grown over the years since the opening up of the economy. BANGALORE- AN OPPORTUNITY The convergence of professional lifestyles with the demand for fast, tasty food served in a pleasant environment make fast food ventures a leading market area. Bangaloreans are not strangers to the culture of eating out on a regular basis. But such facilities are a definite departure from the traditional fast food outlets. A whole host of trendy, readymade and fast food outlets have mushroomed around Bangalore's new malls and up-market shopping areas catering to time-constrained professionals and the well off middle classes. These new fast food options are burgeoning in Bangalore, because they fit in with changing middle class lifestyle demands and trends. FAST FOOD CONSUMPTION TREND IN BANGALORE The following table shows the rise in sales of fast food outlets in the country between 1988 and 1997. (Although very recent material is unavailable from the internet, this can give information about the trend in the growth in buying potential in India) Industry segment Sales 1988 1997 Million dollars Commercial foodservice 155,702 244,732 Fast food outlets & Restaurants 65,749 100,851 Another graph shown below indicates the growth in soft drinks consumption. Although this is not an exact reflection of the customer interest in fast foods, it has been shown here only because the chart on fast food consumption trend is unavailable for India. It can be said without doubts that the behavioral pattern of the bar charts for fast food trends will be similar. Thus, a clear idea on the consumption pattern of the Indian market, and hence the pattern for Bangalore consumers is portrayed. The graph above shows the rise in the consumption of different types of soft drinks in the country. This can be co-related with fast foods because of the fact that most fast food outlets sell these types of beverages and that is a valid point in argument. CONCLUSION The report has attempted to suggest a rational location for the fast food center. It has moved out of the common country market places like the United States and Canada where there is already a lot of Wendy's outlets. The effect of globalization and improvement in economic conditions in India has provided a lot of scope for MNCs like the Wendy's to explore and exploit in the sub continent. The report has identified Bangalore to be the favourable choice for this fast food business in India. The area of strategy here is the M.G Road, which as already explained has the busiest traffic and is an ideal place for a fast food outlet. It must be also made clear that, many fast food giants like McDonalds and KFC have already begun their entrant activities and are devising bigger plans for the country. It is the right place and right time for the Wendy's to establish. Also, the statistics reveal a good growth in the economy of the country and hence the buying power of the consumer. This is an important area which affirms the market potential in the proposed location. REFERENCES Wikipedia Mahatma Gandhi Road, Bangalore retrieved May 1, 2008 from http://en.wikipedia.org/wiki/MG_Road,_Bangalore Sala Kannan (2005) How to make a success of investing in India retrieved May 1, 2008 from http://www.moneyweek.com/file/5708/india-1912.html Buyer Behaviour Still Drinks Consumption in India Retrieved May 1, 2008 from http://buyerbehaviour.blogspot.com/2007/10/still-drinks-consumption-in-india.html Read More