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Mc Donalds Case Final


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Presenting Marketing issues affecting McD\'s (Global& local) strategies.

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Mc Donalds Case Final

  1. 1. THE McDonald's CASE Examining McDonald’s from local & global marketing perspective Presented by Mission Statement 2009: "McDonald's vision is to be the world's best quick service restaurant experience. Being the best means providing outstanding quality, service, cleanliness, and value, so that we make every customer in every restaurant smile."
  2. 2. McDonaldization <ul><li>McDonald's = emblematic of globalizati o n so called ‘ McDonaldization ’. </li></ul><ul><li>Facts : </li></ul><ul><li>• McD’s is the ninth most valuable brand in the world . </li></ul><ul><li>• Everyday 0.5% of the worlds population visits a McD's. </li></ul><ul><li>• The largest T oy distributor in the world is McD's ! </li></ul><ul><li>• One out of three of all cows in the US used for food purposes (beef) are used by McD's. </li></ul><ul><li>• One in eight Americans has worked for McD's. </li></ul><ul><li>• In China, McD’s have opened 789 stores within the last 8years (only one operates as a franchisee!). </li></ul><ul><li>• Anti-Union policy. </li></ul><ul><li>Figures : </li></ul><ul><li>McDonald's Hellas dismissed recent press claims alleging that the company was planning to end its presence in the Greek market . </li></ul><ul><li>Record losses in Greece during 2004 & 2005 – €14.8m & €14m respectively. </li></ul><ul><li>Annual Turnover in Greece estimated at €40-45m. </li></ul><ul><li>$116m USD invested by McD’s in Greece (1991-2005). </li></ul><ul><li>During Jan’09-Sept’09 McD’s recorded 11% increase in sales compared to last season. </li></ul><ul><li>Global figures for fiscal year ending December, 2008: Sales: $23,522.4M One year growth: 3.2% Net income: $4,313.2M Income growth: 80.1% </li></ul><ul><li>Main Competitors in Greece : </li></ul><ul><li>Goodys </li></ul><ul><li>Everest </li></ul><ul><li>Pizza Hut </li></ul><ul><li>Dominos </li></ul><ul><li>Gregorys fast food restaurants </li></ul><ul><li>KFC </li></ul><ul><li>Simply Burger </li></ul>
  3. 3. Segmentation <ul><li>Geographical Segmentation : </li></ul><ul><ul><li>CEO Jim Skinner said, &quot;Over the last seven years, we have stayed committed to the Plan to Win and our focus on being better, not just bigger </li></ul></ul><ul><ul><ul><li>Global: Global Market operations (118 countries): 30,000 restaurants, 1.5m workforce. Serving approximately 45m people/day. 70% company owned. </li></ul></ul></ul><ul><ul><ul><li>Local (since 1991): 50 restaurants, 1,500 workforce. Serving approximately 11,000 customers/day nationwide. </li></ul></ul></ul><ul><li>Demographic Segmentation (local): </li></ul><ul><ul><li>Teens, Students, Kids & Families, Business adults and traveling/visiting Tourists. </li></ul></ul><ul><li>Psychographic Segmentation (local): </li></ul><ul><ul><li>Environmental awareness, Respect local customs and values, Convenience, Lifestyle, Distinct Identity, Emotional values. </li></ul></ul><ul><li>Behavioral Segmentation (local): </li></ul><ul><ul><li>Occasions e.g. Birthdays, kids parties, reunions etc. </li></ul></ul>
  4. 4. Targeting <ul><li>Kids 3-7 yrs old: Happy Meals (healthier option) with free toys and access to kids playground; </li></ul><ul><li>Families: Weekend outings or meals, drive-Thru’s and expressways; </li></ul><ul><li>Teens and students; </li></ul><ul><li>Sports Fans; </li></ul><ul><li>Coffee goers - McCafe is operating at the Athens International Airport; </li></ul><ul><li>Working adults; </li></ul><ul><li>Travelling and visiting tourists </li></ul><ul><li>24hr access in certain restaurants. </li></ul><ul><li>Drive Thru customers; </li></ul><ul><li>Vegetarians; and </li></ul><ul><li>McSarakosti meals. </li></ul>
  5. 5. Current Positioning <ul><li>McDonald’s positioning strategies currently focus on: </li></ul><ul><li>‘ Kids’ via ‘Roland McDonald’ brand strategy. </li></ul><ul><li>‘ Family’ via “I’m Loving It” brand strategy. </li></ul><ul><li>‘ Teenager’ via the introduction of the McCafe. </li></ul><ul><li>Health and Wellness campaign. McD’s provide nutritional facts of its products and introduces healthy food. </li></ul><ul><li>Other positioning motions (aiming at peoples perception about McD’s) include: </li></ul><ul><li>Imposing environmental policies (natural sources, solid waste etc.) </li></ul><ul><li>Sponsoring national and international sports events (Olympics, World Cup, Champions League etc). </li></ul><ul><li>Actively participating in local/communal events. </li></ul><ul><li>Established the Hellenic World foundation for Children. </li></ul><ul><li>Collaboration with the Association of Social Paediatrics Friends (financed two Play Therapy Places in pediatric hospitals in Athens and Salonika). </li></ul><ul><li>Equal Opportunities employer (employing Elderly people and from all ethnic backgrounds). </li></ul><ul><li>Future trends affecting positioning strategies: </li></ul><ul><li>Future Positioning strategies for McD’s will be affected by: </li></ul><ul><li>The New media (communicate products & services, promote culture, interact with the customer etc.); </li></ul><ul><li>Social Media; </li></ul><ul><li>Environmental awareness; </li></ul><ul><li>Promoting events such as the World Children’s Day (Nov 20 th ); </li></ul><ul><li>Promoting current waste management schemes and recycling processes. </li></ul><ul><li>Continue the support to local communities/Charities (Xamogelo tou Paidiou, refugees) and </li></ul><ul><li>Participation in communal activities (e.g. Reforestation) and contribute towards the education of the youth. </li></ul><ul><li>Continue to promote Health and Wellness and introduce biological products. </li></ul><ul><li>Majority of GDP is made from imports sector. </li></ul>
  6. 6. <ul><li>Marketing Mix : </li></ul><ul><li>PRODUCT : </li></ul><ul><ul><li>VARIATION - A wide variety of products (beef, chicken, pork, fish etc.) with healthy and vegetarian options. </li></ul></ul><ul><ul><li>INNOVATION : </li></ul></ul><ul><ul><ul><li>(Health and Wellness) - Offering nutritional value, GDA and nutrients information contained in McD’s products. </li></ul></ul></ul><ul><ul><ul><li>Unique food (localized menu) e.g. McSaracosti, Chinese New Year meal, McCurry pan etc. </li></ul></ul></ul><ul><ul><li>DIFFERENTIATION – </li></ul></ul><ul><ul><ul><li>Investing in the coffee sector (McCafe). </li></ul></ul></ul><ul><ul><ul><li>Focusing on Kid’s market. </li></ul></ul></ul><ul><ul><ul><li>Collaboration with local suppliers offering quality materials. </li></ul></ul></ul><ul><ul><li>PRODUCT ELIMINATION (competition) – Visiting tourists in the Greek isles (ages 17-25) prefer a ‘Big Mac’ than local cuisine/local food chains. </li></ul></ul><ul><li>PLACE : </li></ul><ul><ul><li>DISTRIBUTION CHANNEL (direct): </li></ul></ul><ul><ul><ul><li>1,000 New restaurants planned for 2010. No announcements for Greek market. </li></ul></ul></ul><ul><ul><ul><li>Re-location and closure of underperforming restaurants. </li></ul></ul></ul><ul><ul><ul><li>Restaurants revamped (2,300 for 2010), closed stores and ended business relationships with franchisees not fulfilling their commitments to their contracts. </li></ul></ul></ul><ul><ul><ul><li>Leader in global logistics operations. </li></ul></ul></ul><ul><ul><li>DIRECT SALES - Restaurants located in areas with the highest concentration of kids, teens and visiting tourists. </li></ul></ul><ul><ul><li>MARKET COVERAGE – Covering all central districts in cities and near areas with the highest concentration of the targeted groups. Restaurants and McCafe’s located at airports. </li></ul></ul>The Marketing Mix – Think Global act Local
  7. 7. The Marketing Mix – Think Global act Local <ul><li>PROMOTION : </li></ul><ul><li>McDonald’s localize all marketing communication strateg ies. </li></ul><ul><ul><li>In 2009 McD’s has launched the biggest advertising campaign since 1970. </li></ul></ul><ul><ul><li>World Children’s Day (Nov 20th); </li></ul></ul><ul><ul><li>Reconnecting with customers via ‘McDonaldland’ (US), ‘I’m loving it’, ‘Roland McDonald’ (US) brand strategies . </li></ul></ul><ul><ul><li>Sponsorships in various events (Business, local, sports, social etc.). </li></ul></ul><ul><ul><li>80-20 menu boards (80% visual – 20% descriptive). </li></ul></ul><ul><ul><li>Toys with every kids meal. </li></ul></ul><ul><ul><li>Personal Selling – skilled employees (McD’s took over from the US navy as the world’s larger training organisation). </li></ul></ul><ul><ul><li>Banners and ads and leaflets. </li></ul></ul><ul><li>PRICE : </li></ul><ul><ul><li>Mission statement: “ Being the best means providing outstanding quality, service, cleanliness, and value ” </li></ul></ul><ul><ul><li>PENETRATION PRICING : </li></ul></ul><ul><ul><ul><li>Synergy with Green Mountain coffee Co for McCafe products. </li></ul></ul></ul><ul><ul><ul><li>Value pricing ‘One for One’ offers; </li></ul></ul></ul><ul><ul><ul><li>New meal introductory low prices; </li></ul></ul></ul><ul><ul><li>PRODUCT LINE PRICING : Strategy falls solely on the cluster product lines (flexibility). </li></ul></ul><ul><ul><li>PROMOTIONAL PRICING : Weekly/monthly offers usually seen on banners. </li></ul></ul><ul><ul><li>Affordable & Competitive from €1/$1 </li></ul></ul>
  8. 8. The Marketing Mix – Think Global act Local <ul><li>PROCESS : </li></ul><ul><ul><li>8th year running of the PLAN to WIN strategy aiming at g rowth in sales, market share and returns through a strategic focus on its customers and restaurants . </li></ul></ul><ul><ul><li>Allocating environmental affairs officers worldwide. </li></ul></ul><ul><ul><li>Localization of all marketing communications strategies. </li></ul></ul><ul><ul><li>ISO 9001:2000, HACCP, Codex Alimentarius certifications (World Health Organisation). </li></ul></ul><ul><ul><li>Community support (employment, funding, sponsorships, etc.). </li></ul></ul><ul><li>PHYSICAL EVIDENCE : </li></ul><ul><ul><li>Menus built from scratch with local variations. . </li></ul></ul><ul><ul><li>Reducing queuing times. </li></ul></ul><ul><ul><li>Food served warm & fresh. </li></ul></ul><ul><ul><li>Cleanness. </li></ul></ul><ul><ul><li>Revamped and new restaurants. </li></ul></ul><ul><ul><li>McCafe’s friendly environment. </li></ul></ul><ul><li>PEOPLE : </li></ul><ul><ul><li>Well qualified and trained Store managers, staff and contractors. </li></ul></ul><ul><ul><li>Collaboration with local franchisees (local market knowledge). </li></ul></ul><ul><ul><li>Collaboration with local producers (quality and freshness of products, delivery times). </li></ul></ul><ul><ul><li>Collaboration with Coke, MTv, Sony music etc. </li></ul></ul>
  9. 9. Gap Analysis <ul><li>Gap analysis is conducted from different perspectives, as follows: </li></ul><ul><li>Product : </li></ul><ul><ul><li>In a consumer survey, McDonald’s was ranked as last out of 60 chains for taste. </li></ul></ul><ul><li>Organization : </li></ul><ul><ul><li>McDonald’s should provide valuable skills for their people instead of encouraging the industry to design kitchen equipment that afford less training. </li></ul></ul><ul><ul><li>Avoid exploitation of kids in third world countries (In China McD’s employed 14yr. Old kids working on 16hr days for $3 ). </li></ul></ul><ul><li>Customer : </li></ul><ul><ul><li>McDonalds food is soaring rates of childhood obesity, heart disease, and diabetes, which customers are not warned about. </li></ul></ul><ul><ul><li>More customers need to be made aware about the nutrition information which is avalabile. </li></ul></ul><ul><li>Business direction : </li></ul><ul><ul><li>Unions are part of a modern society and McDonald’s should consider introducing unions. </li></ul></ul><ul><li>Business processes : </li></ul><ul><ul><li>There is no physical evidence of actually achieving the necessary environmental aims and objectives. </li></ul></ul><ul><ul><li>Kids’ market exploitation strategies might ‘backfire’. </li></ul></ul><ul><li>Information technology : </li></ul><ul><ul><li>Underdeveloped Social media channels. </li></ul></ul><ul><li>“ We approach all aspects of our business with honesty and integrity. We hold ourselves to the </li></ul><ul><li>highest possible ethical standards” </li></ul><ul><li>McDonalds Social Responsibility Report </li></ul>
  10. 10. Recommendations <ul><li>Actively impose strict environmental policies worldwide and synergise with other competitors on this issue. </li></ul><ul><li>To become a more desirable employer McDonalds should aim to provide better working conditions. </li></ul><ul><li>Allow the existence of unions, increase the number of training schemes and avoid exploiting teens. </li></ul><ul><li>Accommodate more healthy foods as a way to differentiate. </li></ul><ul><li>Avoid manipulative strategies (teens, minorities etc.). </li></ul><ul><li>Enhance promotion via various communication channels. Use of the social media. Two-way communication. </li></ul><ul><li>Develop Delivery services and ecommerce practices. </li></ul><ul><li>Improve size and taste of burgers! </li></ul><ul><li>Move with the marketplace. </li></ul><ul><ul><li>Most companies in the industry l ook at their brands from an economic point of view. L ong -t erm, they should look at their brands from the mind’s point of view. </li></ul></ul><ul><li>It’s not about knowing your customer. It’s about your customer knowing what makes you differen ! </li></ul>
  11. 11. <ul><li>After decades of research, only one </li></ul><ul><li>question correlates to an organization’s </li></ul><ul><li>profitable growth: </li></ul>The Ultimate Question 0-6 7-8 9-10 Detractors Passive Promoters
  12. 12. Thank you for your attention!