Mc Donalds Slides Draft 5

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  • could you kindly send it to landscape_girlz@hotmail.com ? Really appreciate it!
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  • Hi Ken, would appreciate if you could send me these slides for reference, to takakospeed@hotmail.com
    Thank you.
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  • Boa noite! poderia enviar sem ser em arquivo PDF para o e-mail, tayennematos@hotmail.com, achei muito legal o trabalho
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  • Hi! It would be great if you could send me this informative slides to my email:
    bubbly-soul@hotmail.com Thank you! ( ^_^ )
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  • can u plz email me these slides at marissa_trim@hotmail.com
    thank u
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Mc Donalds Slides Draft 5

  1. 1. Marketing Environment (4Cs) Company (Value, Tactic, Strengths and Weaknesses) Customers (Segmentation, Customer Profile & Target Market) Competitors (Competitive Analysis and its Positioning) Change (Environmental Factors - Opportunities and Threats) Recap: TOWS Analysis and STV Model Marketing Opportunities Marketing Mix – 4Ps Financial Statements Overview: Impact and Implications 2
  2. 2. 3
  3. 3. COMPANY Value & Tactic CHANGE Marketing Mix (4Ps) Strengths & Weaknesses CUSTOMERS COMPETITORS 4
  4. 4. The McDonald's System leverages the unique talents, strengths and assets of our diversity around the globe in order to be our customers' favourite place and way to eat. Promote Diversity and Inclusion among our Employees, Owner/Operator's and Suppliers who represent the diverse populations McDonald's serves around the globe. 5
  5. 5. Global Outlook of McDonalds US$23 billion in total revenues in 2007 (record high) 1.6 million restaurant employees worldwide 24,500 restaurants around the world offering extended or 24-hour service 1 billion more customers were served in 2007 than in 2006 6
  6. 6. McDonald’s in Singapore First opened in October 1979 at Liat Towers To date, more than 100 McDonald’s restaurant across the island Serving 1.2 million customers every week 6,000 employees to keep McDonald’s running in Singapore Source: McDonald’s Singapore 7
  7. 7. Analyzing the STV Triangle: 2 Components (‘Tactic’ and ‘Value’) ‘Strategy’ to be covered under Customers and Competitors 8
  8. 8. 9
  9. 9. Value (Heart Share): Process Cost-Efficient, Transparent (nutritional info), Service Product Quality (freshness) Quality Customer Service, Brand 24-hour outlets, Online/Phone Orders, Prompt Delivery Service 10
  10. 10. Tactic (Market Share): Selling Transactional, Phone Orders, Internet Orders, Marketing Mix Drive-Thru Product Differentiation Price Promotion Place Kids’ Favorite Place Shared Lifestyle 11
  11. 11. Tactic (Marketing Mix): Product: Wide Range of Food Products Wide Breadth and low depth Drinks soft drinks, non-carbonated drinks, fruit juices, milk, coffees (Mccafe) Food McChicken burger, Big Mac, Filet-O’Fish, McWings, McNuggets, French Fries Dessert Ice Cream Cone, Sundae, McFlurry, Cakes Sides Apple Dippers, Corn Cup, Apple Pie 12
  12. 12. McDonalds’ Product Line Breakfast Main Sides Dessert Drinks Others 13
  13. 13. Tactic (Marketing Mix): Price: Competitive and Affordable Pricing Also practice International Pricing and Price Discrimination (Student Meal - $4.50) Drinks soft drinks and non-carbonated drinks ($1.65 - $2.05), fruit juices ($2.50), milk ($1.75) Mccafe above $3.50 for a drink or cake Food burgers ($2 - $4.35), Meals ($5.95 onwards) Dessert $0.60 - $2.50 Sides $1.00 - $2.55 14
  14. 14. 15
  15. 15. Tactic (Marketing Mix): Promotion: TV Advertisement, Endorsement, Coupons, Exclusive distribution of movie premiums (Happy Meal), Loss Leader ($2 McChicken), “I’m Lovin’ It” 16
  16. 16. Tactic (Marketing Mix): Product: Wide Range of Food Products (breadth vs. depth) Price: Competitive and Affordable Pricing, Price Discrimination Promotion: TV Advertisement, Endorsement, Coupons, Exclusive distribution of movie premiums, Loss Leader…. Place: Direct Marketing Channel, Intensive Distribution, Physical Outlets (opened by McDonalds or Franchisees) 17
  17. 17. Tactic (Market Share): Selling Transactional, Phone Orders, Internet Orders, Marketing Mix Drive-Thru Product: Wide Range Price: Competitive, Affordable, Differentiation Price Discrimination Promotion: Coupons, TV ads Place: Intensive Distribution Kids’ Favorite Place Shared Lifestyle 18
  18. 18. TOWS: Strengths and Weaknesses Market Leader with a Market Share of 27% 19
  19. 19. TOWS: Strengths and Weaknesses Market Leader with a Market Share of 27% 1.50% McDonalds 2.10% 2.00% 1.50% KFC 4.70% Burger King 5.00% 27% 7-Eleven 8.40% Subway 20.60% Long John Silver 9.40% Delifrance MOS Burger Haagen Dazs Fast Food in Singapore (dated 15-Oct-2007) Source: Euromonitor International Yoshinoya 20
  20. 20. BCG Model 20% MARKET GROWTH (Cash Utilization) 10% 0% 10x 5x x 0.5x 0.1x RELATIVE COMPETITIVE POSITION Market Share (Cash Generation)
  21. 21. TOWS: Strengths and Weaknesses STRENGTHS Market Leader with 27% of the market share Global brand power, Global Presence Economies of scale (transfer cost savings to customers) Convenient Locations and Payment Methods (Ezlink) Appeals to the mass market (especially the kids) 24/7 Operations, Drive Thru, Delivery (extensive coverage of the market) Halal certification Ronald McDonald Children’s Charity WEAKNESSES Franchising fragility – control over franchises McDonalds is often perceived as junk food 22
  22. 22. Societal Marketing Concept Ronald McDonald Children’s Charity (RMCC) donates its partial earnings to the foundation World Children’s Day 23
  23. 23. 24
  24. 24. COMPANY Value & Tactic CHANGE Marketing Mix (4Ps) Strengths & Weaknesses CUSTOMERS COMPETITORS Customer Profile Segmentation (Geographic, Demographic, Psychographic…) Target Market 25
  25. 25. McDonald’s Restaurants in Singapore Woodlands Toa Payoh Bishan Sembawang Ang Mo Kio Yishun Hougang Boon Keng Bukit Timah Serangoon Clementi Choa Chu Kang Jurong Bedok Commonwealth Changi Dover Pasir Ris NUS Tampines NTU Aljunied West Coast Eunos Potong Pasir Bugis Tiong Bahru Orchard Raffles Place HarbourFront Chinatown City Hall Marina Square 26
  26. 26. Market Segmentation Geographically-segmented Islandwide Tampines, Woodlands, Clementi, Orchard, NTU… McCafes – 22 outlets islandwide Demographic Segmentation Kids, Family, Students Psychographic Segmentation Convenience and Lifestyle Behavioral Segmentation Occasions, e.g. birthday parties
  27. 27. Target Market (and Customer Profile) Kids - 3 to 7 years Happy Meal (healthier choice) with free toys Families - Weekend outings or meals Drive-Thru, Takeaways, McDelivery, Happy Meal Students - Primary, Secondary, JC, Poly, Uni (a place to hang out or study) Student Meals, outlets at SP, NYP, NUS and NTU, 24-Hour Café goers - for quieter ambience, a place to relax or read or even business entertainments McCafe Working Adults - seek convenience meals; “grab and go” Drive-Thru, Takeaways, McDelivery, 24-Hour
  28. 28. 29
  29. 29. COMPANY Value & Tactic CHANGE Marketing Mix (4Ps) Strengths & Weaknesses CUSTOMERS COMPETITORS Customer Profile KFC Segmentation (Geographic, Burger King Demographic, Psychographic…) Subway Target Market Starbucks Coffee Shops & Food Courts 30
  30. 30. Fast Food Industry - Market Share 2.10% 1.50% McDonalds 2.00% 1.50% KFC 4.70% Burger King 5.00% 27% 7-Eleven 8.40% Subway 20.60% Long John Silver 9.40% Delifrance MOS Burger Haagen Dazs Oligopoly Fast Food in Singapore (dated 15-Oct-2007) Source: Euromonitor International Yoshinoya Market? 31
  31. 31. Types of Competitions Brand (direct competition) McDonalds, Burger King, KFC, KFC’s Chicky Club, Subway, Carl’s Jr Form (similar in form but not direct) Long John Silver, Pizza Hut, Yoshinoya Generic (satisfy the same need of hunger) Chinese Restaurants, Food Courts, Coffee Shops, etc Desire Ice-cream treat, movies, shopping, etc
  32. 32. Competitors Starbucks Coffee Bean Coffee Club Spinelli Coffee TCC Pacific Coffee Club 33
  33. 33. Competitors’ Analysis CHARACTERISTICS Market Share 27% 20.6% 9.4% Products Burgers, McCafe Chicken, Burgers Burgers Kids Meal Happy Meal Chicky Meal BK Kid’s Meal Average Value Meal $5.95 $6.40 $5.90 Promotions TV ads, Coupons TV ads, Coupons TV ads, Coupons Distribution (Outlets) 115 77 42 Delivery Service 6777-3777 6222-6111 None Charity/Sponsorship RMCC, Olympics KFC Colonel's Kids Make-A-Wish Foundation Sources: McDonalds, KFC and Burger King Webpages (Singapore) 34
  34. 34. RONALD MCDONALD Every child's best friend. He is funny, generous, warm, smart, friendly and caring. He is always surrounded by his McDonaldland friends - Hamburglar, Grimace, Birdie and Fry Gals and and Guys. Today, Ronald McDonald speaks more than 24 languages. He remains the same friendly, fun-loving person. His favourite food is still hamburgers - and his favourite people are still children! Source: http://www.mcdonalds.com.sg/brand_slogan.htm
  35. 35. “i’m lovin’ it” DON’T JUST LIVE LIFE, LOVE IT quot;i'm lovin' itquot; focuses on the optimism and enthusiasm that mark great times and enriching discoveries. Whatever you pursue - be it sports, education, creative endeavours, career advancement, boisterous companionship or intimate moments - there is every reason to like what you do and love who you are. Don't just live life. Love it - at McDonald's, we're certain it'll love you back! Source: http://www.mcdonalds.com.sg/brand_slogan.htm
  36. 36. Positioning “Ronald McDonald” branding “I’m Lovin’ It”, creates the shared lifestyle and new branding Sponsorship – Olympics (since 1976), World Cup (since 1994) Ronald McDonalds Children’s Charity Delivering Quality Service to its customers Service Quality Class Recognition (1998) Excellent Service Award (1996, 2003 – 2006) Equal employment opportunities Employs the elderly Best Employers in Singapore 2007, SHRI HR Awards 2007 Only 24-hour fast-food restaurant in Singapore Sources: http://www.mcdonalds.ca/en/aboutus/sport.aspx, http://www.mcdonalds.com.sg/awards.htm 37
  37. 37. 38
  38. 38. CHANGE Health and Wellness COMPANY Ageing Population Value & Tactic Inflation rate Marketing Mix (4Ps) Birth Rates Strengths & Weaknesses CUSTOMERS COMPETITORS Customer Profile KFC Segmentation (Geographic, Burger King Demographic, Psychographic…) Subway Target Market Starbucks Coffee Shops & Food Courts 39
  39. 39. 1. Health and Wellness More Singaporeans are becoming health conscious General perception has been formed that fast foods are considered as unhealthy, junk food. In general, the Singapore Government has been active in encouraging healthy living and lifestyles from diet regimes for national servicemen and students to posters in hawker centres encouraging the consumption of more vegetables and less meat. Correspondingly Singaporeans, too, are increasingly becoming more health-conscious. Levy taxes on unhealthy foods to tackle obesity Source: The Straits Times, Oct 26, 2007 40
  40. 40. 1. Health and Wellness Organic fare makes its way to fine dining 3 March 2008 The Business Times, Singapore Healthy in the heartlands 7 June 2008 TODAY, MediaCorp Press Ltd Is a light carbonated soft drink = plain water? 4 May 2008 The Straits Times, Singapore Press Holdings Limited Good or bad for health? 28 August 2008 The Straits Times
  41. 41. 1. Health and Wellness McDonalds provide the nutritional facts of its products and introduced more healthy food in its menu such as the chicken wrap, salad, corn and apple dippers. The move by the fast-food giant in Singapore is part of a healthy-image makeover the Golden Arches is undergoing globally. The burger chain would label the fat, salt, calorie and carbohydrate content of its food. The Health Promotion Board is working with the fast-food chain on providing nutritional education... help consumers make sense of it. McDonald's takes healthy bite with nutrition labels Source: The Straits Times, 29 December 2005 42
  42. 42. 1. Health and Wellness You can quot;veg outquot; every first day of the month at any McDonald's restaurant. Purchase Fresh Sidekicks such as Corn Cup, Apple Dippers or Fresh Salad for $1 only, with no additional purchase necessary. quot;McDonald's 'Veg-out Day' initiative highlights the availability of fruit and veggies at its outlets, in line with our support for the Health Promotion Board's 'eat 2 servings of fruit + 2 servings of veggies' public educational outreach programmes McDONALD'S DECLARES FIRST DAY OF THE MONTH A quot;VEG OUTquot; DAY! Source: TODAY, 4 August 2006 43
  43. 43. 2. Ageing Population Census Median Singapore Dependency Ratios Year Age Year Total Child Old-age 1921 28 1960 83 79 4 1931 26 1965 86 81 5 1970 73 67 6 1947 23 1975 59 52 7 1957 19 1980 47 40 7 1970 20 1985 42 34 7 Increasing median age 1990 37 29 8 1980 24 1995 40 31 9 1990 29 2000 41 31 10 2000 34 2005 39 27 12 2010 35 21 14 2010 37 2015 36 17 18 2020 39 2020 42 17 25 2030 41 2025 54 19 35 2030 68 22 46 Report on the Ageing Population (1999) Source: Singapore Census of Population 2000 Source: Singapore Dependency Ratios United Nations: World Population Prospects: Revision 2006
  44. 44. 2. Ageing Population Due to improving living standards and medical technologies, there has been a rising trend of ageing population Population pyramid: lopsided in 2030? Increasing trend in the dependency ratio Source: Demographic Indicators, Singapore Department of Statistics, 2007 45
  45. 45. 3. Inflation Rate Consumer Price Index Source : Singapore Statistics Department, August 2008 Source : Singapore Statistics Department, 2007 Singapore is faced with a rising inflation Singapore’s annual inflation rate was 6.5% in July Source: Channel NewsAsia - Singapore's July inflation up 6.5% on-year 46
  46. 46. Period Total fertility 1950-1955 6.40 1955-1960 5.99 1960-1965 4.93 4. Birth Rates 1965-1970 3.46 Declining Trend (6.4 vs 1.29) 1970-1975 2.62 1975-1980 1.87 Although Singapore is experiencing 1980-1985 1.69 declining birth rates, the government 1985-1990 1.71 is trying hard to promote birth. 1990-1995 1.76 1995-2000 1.57 2000-2005 1.35 2005-2010 1.29 2010-2015 1.29 Source: Singapore Total fertility (children per woman) United Nations: World Population Prospects: Revision 2006 47
  47. 47. 4. Birth Rates In the recent National’s Day Rally 2008, PM Lee announced the increase in benefits for mothers as a move to encourage more women to give birth. These included longer paid maternity leave (extended to four months), childcare subsidies, tax credits, subsidies for in-vitro fertilisation and more child allowances for mothers. Will Birth Rate Increase?
  48. 48. IN SUMMARY: TOWS Analysis & STV Model 49
  49. 49. THREATS Intense Competitions Growth of health conscious eaters Outbreak of diseases (madcow, H5N1, bird flu, SARS) Recent hygiene complaints affect sales OPPORTUNITIES Expansion of other cashless payment systems Wellbeing and ethical image improvement Expansion of the children market (other business – market penetration) Setting up vegetarian menus or outlets to expand the market WEAKNESSES Franchising fragility – control over franchises Perceived as junk food STRENGTHS Market Leader with 27% of the market share Global brand power, Global Presence Economies of scale Convenient Locations and Payment Methods (Ezlink) Appeals to the mass market (especially the kids) 24/7 Operations, Drive Thru, Delivery (extensive coverage of the market) Halal certification Ronald McDonald Children’s Society
  50. 50. SELLING Transactional Selling, Phone/Internet Orders, SEGMENTATION Drive-Thru Segment Marketing MARKETING MIX TARGETING Product: Wide Range Kids, Families, Student, Brand Price: Competitive, Affordable, Café-goers, Working Integrity Int’l Pricing, Price Discrimination Adults POSITIONING DIFFERENTIATION Promotion: Coupons, TV ads i’m lovin’ it Kid’s Favorite Place Place: Intensive Distribution Ronald McDonald Shared Lifestyle ge Br an ma d dI Id en an tit Br y SERVICE Good Customer Service, 24- Hour outlets, Delivery Service PROCESS Cost efficient, transparent, Quality products 51
  51. 51. Marketing Opportunities Venturing into the Vegetarian outlet Revamping existing outlets Introducing healthier menus Expanding the Kids’ market Venturing into new business - clothings 53
  52. 52. Why the Kids Market? Children remains as one of the main target market for McDonalds, why not expand the market? “Every parent loves their kid(s)” CROSS-SELLING opportunities Despite the declining birth rate, we will expected a fall in population for that target market. However, we can BOOST demand through….. 54
  53. 53. Why the Kids Market? Demand = Population x Price x Frequency Population = ↓ Price = Competitive Pricing or Penetration Pricing Frequency = ↑ Thus, our marketing objective will be to look at ways to increase frequency, buying behaviours and upselling. Demand Function 55
  54. 54. Ansoff’s Product/ Market Expansion Grid Existing Product New Product Market Product Existing Penetration Development Market Market New Development Diversification Market 56
  55. 55. “McDonaldland” MARKETING STRATEGIES 57
  56. 56. Product PRODUCT McDonaldland Concept: McDonaldland-themed Playground McDonaldland Membership Card McDonaldland Exclusive Line of Kids Wear
  57. 57. Floor Plan for McDonaldland 59
  58. 58. Product
  59. 59. Product Front view McDonaldland Membership Card Targeted at kids below 12 years Membership Fees S$10 per year S$25 for 3years Register at any McDonalds outlets in Singapore. Register online, www.mcdonaldsland.com.sg/membership.htm Back view
  60. 60. Product Register and hop on with Ronald and friends as they embark on monthly learning journeys to places of interest, farms. Attend weekly drawing/singing sessions organized. Make New friends! Come and join Ronald for go-active fun! Move to the beat with fun and simple workout – learn creative ways to exercise, keep fit with Ronald! Enjoy exclusive offers with McDonaldland! Be rewarded with gifts on your birthdays McDonald - 10% off birthday party packages Popular – 10% off regular priced items Yamaha – 10% off courses Swensons – 15% off birthday cakes and many more! 62
  61. 61. Product McDonaldland Membership Card How our Points System Works? Flash your card and collect points as you dine and retail with us. Activities Points McDonaldland Activities 10 pts Happy Meal Set 20 pts McDonaldland Kids Wear 50 pts Referral of Friends 100 pts 63
  62. 62. Product McDonaldland Membership Card How to redeem the points? With your points earned, exchange points to redeem meals, kids wear and many other attractive items for FREE! Redemption Options Points Mystery Gift 40 pts Vanilla Ice Cream Cone 60 pts Regular French Fries 80 pts Cheeseburger 100 pts Happy Meal 200 pts McDonaldland Apparels 300 pts 64
  63. 63. Product McDonaldland Membership Card Kids Identity – We all have it! Let the kids be McDonaldland’s advocates! With the points system, our little advocates will be driven to spread by word of mouth and through peer influence the benefits of McDonaldland Membership Card. DADDY!!! They all have it! I want it too! 65
  64. 64. Product McDonaldland vs Chicky Club McDonaldland KFC’s Chicky Club Membership Fees $10 per year $10.20 per year $25 for 3 years Registration procedure At any McDonaldland outlets or Only through roadshows online Benefits McDonald - 10% off purchases KFC – 10% off purchases & & birthday party packages birthday party packages Popular – 10% off regular Pizza Hut – 10% off a la carte priced items purchases Yamaha– 10% off courses City Chain – 10% off non- Swenson – 15% off birthday promotional house brand cakes Fox Kids – 10% off regular : priced items Points System Accumulate points and -NA- redeem freebies 66
  65. 65. McDonaldland Kids Wear Targeted at kids 7 colours per design; Red, Pink, Blue, White, Black, Green and Yellow Sizes; XS, S, M, L, XL
  66. 66. Product McDonaldland Kids Wear Housebrand Designs - McDonald’s own characters Movie-designed Tees - Movies: Madagascar 2 (release 13 Nov 2008) Exclusive Distributorship of Merchandise Tap on Happy Meal (existing relationship with Disney, Pixar, Dreamworks, etc) to extend the new product line of clothings Price: $8 to $12.50
  67. 67. Price PRICE PRODUCT PRICING Membership Fees $10 per year / $25 for 3 years Kids Wear - Housebrand $8.00 per piece - Movie Characters $12.50 per piece McDonaldLand $11 per set (basic combo) Bundled Offer $15 per set (movie combo) 69
  68. 68. Price Bundled Offer 1 Happy Meal of your choice A top from McDonaldland Kids Wear 1 Mystery gift 70
  69. 69. Place PLACE Three existing McDonald outlets will be revamped Outlets located in areas with the highest concentration of kids indicators: age of the housing estates, no of primary school Proposed Areas: Yishun Central Tampines Central West Coast Park 71
  70. 70. Promotion PROMOTION Banners Outside McDonaldland outlets to create awareness Roadshows a max. of 3 roadshows a month around Singapore (near shopping malls or MRT stations) to create awareness and encourage membership sign ups Public Relation - sponsorship of Kids Central Membership perks and benefits Bundling offers to spur buying behaviour Launch McDonaldland concept on Children’s Day (every Children’s Day is our birthday) 72
  71. 71. Brand Integrity POSITIONING DIFFERENTIATION i’m lovin’ it Kid’s Favorite Place Ronald McDonald Shared Lifestyle McDonaldland e Br ag an Im d Id d en an tit Br y
  72. 72. “McDonaldland” FINANCIAL STATEMENT Accounting Period – 1 Oct 2008 – 31 Sept 2009 Accounting Period – 1 Oct 2009 – 31 Sept 2010 74
  73. 73. PROJECTED SALES SALES Year 1 Membership 20,352*$10.00 $203,520 Clothes - Housebrand 13,568*$8.00 $108,544 Clothes - Movie Character 40,704*$12.50 $508,800 $820,864 Assumption Population of kids age 14 and below 678,400 3% of the kids take up our membership 20,352 Cost of membership $10 2% of the kids purchase 1 of housebrand top 13,568 Cost of Housebrand Top $8.00 2% of the kids will purchase movie tops 13,568 678.4 Average 3 kids movie release per year 40,704 Cost of Movie Character Top $12.50 Source: http://www.singstat.gov.sg/pubn/popn/respop.pdf
  74. 74. PROJECTED SALES SALES Year 1 Membership 20,352*$10.00 $203,520 Clothes - Housebrand 13,568*$8.00 $108,544 Clothes - Movie Character 40,704*$12.50 $508,800 $820,864 LESS COST Membership Card 20,352*$1.00 $20,352 Clothes - Housebrand 13,568*$4.00 $54,272 Clothes - Movie Character 40,704*$4.00 $162,816 $237,440 Gross Profit $725,888 76
  75. 75. PROJECTED SALES Gross Profit $725,888 Less: Other Operating Cost Salary $4.50/hr, 3 outlets $73,913 Renovation Costs $100,000*3 outlets $300,000 Promotional Costs - public relations Kids Central $200,000 - banners $600*6 banners $3,600 - roadshow $6,000*12 months $72,000 Miscellaneous Fee $53,048 $702,560 Net profit/(loss) before tax ($179,136) 77
  76. 76. SALES Year 1 Year 2 Membership $203,520 $142,464 Clothes - Housebrand $108,544 $119,398 Clothes - Movie Character $508,800 $559,680 $820,864 $821,542 LESS COST Membership Card $20,352 $14,246 Clothes - Housebrand $54,272 $59,699 Distributorship cost 60000 $80,000 Clothes - Movie Character $162,816 $179,098 $297,440 $333,043 Gross Profit $523,424 $488,499 Less Other Operating Cost Salary $73,913 $73,913 Renovation Cost $300,000 0 Promotion - public relations $200,000 $200,000 - banners $3,600 0 - roadshow $72,000 $36,000 Miscellaneous Fee $53,048 $53,048 $702,560 $362,960 Net profit/ (loss) after tax -$179,136 $125,539 78
  77. 77. Impact and Implications Introductory stage of the PLC In the first year of McDonaldland, we incur a net loss $179,136. This is due to the high initial cost of entry such as renovation costs and materializing of promotion efforts to increase awareness. However, when the brand name becomes established, profits should be experienced (breakeven) as reflected in our financial statement of a net profit of $125,539 in year 2. Future Prospects? 79
  78. 78. QUESTIONS & ANSWERS

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