The burger category in India is witnessing a lot of action from the two key players, McDonalds and KFC.

Early this year, KFC focused on getting a bigger bite of the value market with the launch of Streewise range. A few months later, McDonalds launched its premium range of burgers and wraps the McSpicy range. While value segment was McDonalds forte, KFCs strength was premium products. This year, both the burger chains have got into each others space to get a larger share of the market. Product, price and promotion The latest episode of the wrestle between the two is the launch of McSpicy range of burgers from McDonalds in April this year. The McSpicy Chicken burger from McDonalds is quite similar to KFCs Zinger in terms of product, price and packaging. McSpicy Chicken burger is McDonalds first burger with whole muscle crispy chicken. As Amit Jatia, Vice Chairman McDonalds India (West and South) stated at the McSpicy launch, We have introduced Paneer and whole-muscle chicken on our menus for the first time. Interestingly, this crispy chicken used in MCspicy Chicken is very similar to the crispy chicken, which has been KFCs trademark chicken and is also used in the Zinger burger. Even the description about this burger in the menu emphasizes on two elements juicy and crispy (apart from the spicy factor) which has been KFCs USP for all its chicken products. Talking about the MCspicy Chicken burger, Naresh Gupta, National Planning Director, Cheil Worldwide SW Asia, says, McDonalds seems to be acknowledging that KFC has a differentiated product and people are liking the KFC non-mince meat, sumptuous bite Zinger Burger. Purnendu Kumar, Vice President, Retail & Consumer Goods, Technopak Advisors says, I think this is natural that you outdo your competition not only by doing your own things better but also by offering products, which may be popular in the market but you dont have currently. The pricing of the two burgers McDonalds McSpicy and KFCs Chicken Zinger is quite similar too. While a McSpicy Chicken costs Rs. 111, KFCs Chicken Zinger costs Rs. 101 (prices inclusive of tax). In fact, this is the first time that McDonalds has introduced a burger costing over Rs. 100. Experts also feel that, the veg burger of McSpicy range McSpicy Paneer is launched to compete with KFCs Veg Zinger which was launched in 2010 and has been doing very well. Sample this: Market reports suggest that after the launch of Veg Zinger, the contribution of veg products in the KFC revenues has doubled to 10 per cent as compared to five per cent earlier. McDonalds McSpicy will now be a competition to Veg Zinger. The other two products of the MCspicy range include: Big McSpicy Chicken Wrap and Big McSpicy Paneer Wrap. The launch of Spicy range has helped McDonalds. According to market reports, Spicy range contributes 23 per cent of McDonalds sales (as of May 2011) which is equal to the contribution of entry-level products. Going forward, the company is expecting its higher-priced menu to contribute 40 per cent to overall revenues. KFC has been quick to respond and launched Hot Chicken Zinger in April only. Though, KFCs Marketing Director, Dhruv Kaul denies that launching Hot Zinger was in response to McDonalds McSpicy. He says, Focusing on competitive movements and pressure is something that we dont do. We have experimented a lot with products and flavours and we keep adding to those from time to time. We already have the hot flavour range with Hot Wings and Hot&Crispy Chicken. So Hot Zinger is a part of the hot flavour range. What is happening outside of our products is up to you to judge. Is Kaul hinting that the MCspicy range from McDonald is inspired by KFCs Hot range? Well your guess is as good as ours! And the competition is not just in the high end of the market, the value segment has also witnessed action. The launch of Streetwise range starting at Rs. 25 is KFCs attempt to compete in the value segment which is dominated by McDonalds with its Happy Price Menu (starting at Rs. 20). Even at the promotion level, there is some heat between the two burger chains. Last year, KFC introduced Veg Zinger TV commercial, which subtly attacked McDonalds very popular Aloo Tikki Burger. The TVC showed young boys hanging out at a KFC outlet and looking sad. When questioned by a KFC staff, one of the guys, sadly replies, Hamare pyaar ke beech men Aloo ki Tikki aa gayi. To this, the KFC staff enthusiastically tell the boys about the new Veg Zinger and the product shot emphasizes on the quality and taste of the burger. The TVC ends at the shot of the vegetarian girls happily enjoying Veg Zinger at KFC along with the boys. The VO: Hamare pyaar ke beech men Aloo ki Tikki aa gayi was a clear hint at McDonalds Aloo Tikki burger.

KFCs steady catch up The happenings in this market over the last two years shows how KFC has been catching up quickly with McDonalds. Unlike McDonalds which has been a hit among consumers since its launch, KFC had a tough start in the country when it entered first in 1995. But the brands second coming has been good and the retail food chain is steadily catching up. As per the company, it has been growing over 70 per cent over the last few years. Cheils Gupta feels that the reason for KFCs increasing success is its differentiated menu, and outstanding product quality. The whole promise of crunchy outside, juicy inside is really delivered, and this keeps calling consumers back. Also, they have a decent vegetarian offering (rather oxymoronic if you have to eat greens at KFC, but this is India), and this means that the veg veto that used to hurt KFC then, has been over ruled, he adds. KFCs launch of Krushers and other drinks has also helped the brand gain more popularity amongst consumers. Kaul says, Our range of beverages including Krushers, sparklers, crunchies have got a very good response from the youth. Technopaks Kumar says, KFC has been very innovative in terms of its offering, rice meals, and veg meals and that has really helped the brand grow. The (positive) side effects Experts feel that increased competition between the two players is actually good for the category. This will mean more choices for consumers and will also lead to some segmentation in the market. KFCs core audience is teenagers and young working adults while McDonalds core TG is kids. Cheils Gupta agrees, It always takes more than two players to make the category grow. McDonalds made a big splash and made its Softie as its EDLP (Every Day Low Price) store attractor. They have now expanded the Softie to full blown desserts. KFC took humble cold drink and turned it into Shakes and Mojitos. Together, they have become the magnets for consumers to experience McDonalds and KFC. This is what Barista and CCD and Costa have done to coffee bars. However, there is one aspect that both the players havent much focussed on so far i.e. healthy food. The challenge may come from the health conscious segment if the healthy eating trend becomes large. But I dont think there is any immediate threat for them, says Gupta. The consumers are getting health conscious and in such a scenario having more grilled and low fat options may help both the brands to add a few extra bucks in their top and bottom lines. And could be helpful if in the long run consumers take a complete health turn.