Mc DonaldsPakistan (Presence & Competition) - Presentation Transcript
1. STRATEGIC MARKETING MANAGEMENT AND THE CASE OF McDONALD’S IN PAKISTAN
2. Mr. Jamshed AhmedSTRATEGIC MARKETING MANAGEMENT Spring 2010Szabist
3. Group Members
Muffadal Ali (0935109)
Hussain Khairi (0935105)
Muhammad Jaber Haqqani (0935111)
Shaikh Faizan Ahmed (0935117)
Syed Anser Ahmed (0935121)
Rizwan Saleh (0935124)
Key Driving Forces
Vision,Mission & Objectives
Market Audit & SWOT Analysis
Market Segmentation,Target& Positioning
Distribution & Promotion
ManagementControl & Corrective Actions
WHY DID McDonald's CLOSED ITS OPERATION AT DO TALWAR & NAZIMABAD?
> 1954 – 1955
> 1965 – 1973
> 1974 – 1993
> 15% restaurants companyowned
> Rent charged along with franchising fees
> Supply of raw materials via approved suppliers
Types of restaurant
> Drive through service
> Counter service (with/without) play area
> Burger King (global)
> KFC (global/local)
> Others (global/local)
Global Sales Improvement
> Over all – 4.8%
> U.S – 0.6%
> Europe – 5.4%
> Asia/Pacific, Middle East& Africa – 10.4%
Global Sales Revenue 2009 - $22744 mn
9. McDonald’s Pakistan
Opened in 1993 (Lahore) under Lakson Group of Companies
Presentlyoperating 23 branches
Over 1200 employees
Over PKR 30bn has been invested in the country.
Over PKR 10bn is being paid as taxes and duties in comparison to 4bn paid by KFC Pakistan
10. Industry Life Cycle
Market growth rate 13% - 14% per annum.
> Delivery speed
> Customer care
11. Vision,Mission and Objectives
"McDonald's vision is to be the world's bestquick service restaurantexperience.Being the bestmeans
providing outstanding quality,service, cleanliness,and value,so that we make every customer in every restaurant
“McDonald's mission is to be our customers'favorite place and way to eat with inspired people who
delighteach customer with unmatched quality,service,cleanliness and value every time ... we invite you to be the
part of this winning team and give yourself an opportunity to grow with the family of people striving to create smiles on
the faces of millions ofpeople everyday”.
12. Vision,Mission and Objectives
The Planning and Implementation Matrix
o Long term Growth
o Competitive position
o Market Developmenteffort
By pursuing a strategy of differentiation,the organization gives an emphasis to a particular elementofthe marketing
mix that is seen by the customers to be importantand as a resultprovides a meaningful basis for competitive
advantage. This de-massification ofmarkets has led McDonald's towards strategies ofproductvariety
marketing and ultimatelytargetmarketing.As a result,the company’s marketing efforttoday reflects buyers’ needs
for a far wider variety of tastes and demand which are packaged in a number ofdifferent sizes and shapes.
Benefits achieved by McDonald’s following a differentiated Strategy:
Creation of strong brand identities (association of“Mc”)
Distancing from others in the market(KFC for chicken,McDonald's for variety and fun seeking lovers)
15. Strategic Marketing
16. Market Auditing & SWOT
18. Strategic Marketing
The Opportunity Matrix
The Threat Matrix
20. Competitor Analysis
McDonald's doesn’tbelieve that it has a directcompetition because the marketis segmented on a much
They are of the pointthat food industryis the only industry where it is very difficult to alter the taste buds of a
23. Environmental Scanning
McDonald‘s thinks customer feedback is vital and they try to make it as easyas possible for their customers to let
them know what they were thinking and deciding upon.
Their target audience is very fickle.
They enjoy trying new restaurants, and are constantlyadapting to new developments and fads.
24. Porter’s Five Forces
Threat of New Entrants
> High and unfavorable
> A lot of new Dine In restaurants are alreadyin operation.
> Also the demand pattern is changing people are
moving towards more expensive restaurants as they
find more value for their money there.
Political => Political factor can have the major impacton threat of entry. In a region like 3rd world there is hardly any
certainty and this has lead to negative impacton the potential big investors.
Economic => Due to the rising income disparityand the adverse economic conditions,unemploymentis on the rise
due to which the labor costis decreasing,increasing the wealth ofalready well off people which is big factor helping
the Dine In restaurants to grow.
Social => People are now more status conscious in our societyand want more varieties to choose from.
Technological => With the rise in the technologydata can be easilyprocessed and analyzed.With the innovation in
technologythe overall labor cost is reduced together with the fact that selfservice is promoted.
Bargaining Power ofBuyers
> High in the industryas the cost of switching is very low.
> As a food loving nation which makes the industrymore
attractive and profitable and volumes are easyto
> PEST forces such as increasing population is an
appealing opportunity,however, the economic situation
of the region brings along adverse effects on the industry.
Political => This political factor has no direct affect on the bargaining power ofbuyers.
Economic => The increasing population reduces the power of buyers.
Social => The trend is towards dining out,which is increasing the total consumers,thus,reducing their bargaining
Technological => The advancementin technologymakes itpossible for the buyer to gather all the information quickly
and make informed decisions.
Threat of Substitutes
> High as there are plenty of other options available
already in the market.
> People generallylike going to specific restaurants and
cafés because oftheir splendid experience in the past
including ambience and food.
> There are manysubstitutes ofthe fastfood industry.
> Decrease in the purchasing power ofthe people could
lessen their visits to the restaurants therebyincreasing
the threat of substitutes oflower quality than ones of
fast food industry.
> With the increase in the health awareness,people are
substituting from the junk food to a more healthy food.
Bargaining Power ofSuppliers
> High because the inputs are not easilysubstituted.
> The inputs are usuallyof a perishable nature,
thus,stock-ups are not possible.
> McDonald's in Pakistan has to follow a strict
quality procedure that is defined by the mother
> McDonald's has to importthe food related raw
materials as no Pakistani companycan match
Political => There is a need for political will from the governmentside which can help grow dairy farming sector in
Pakistan and bring it onto international standards.
Economic => Current economic conditions are notgood around the world a lot of food related industries have shut
their operations which have limited the number ofsuppliers in the markethence increasing the bargaining power for
Social => There has been a lot of controversies with McDonald's abroad related to its suppliers.
Technological => Technologyhas made it possible to manage and control the poultry industry more efficiently, thus
enabling more suppliers to come in.
Rivalry among existing competition
> The rivalry amongstthe existing firms is moderate
> The marketshare for each of them is deteriorating.
Political => The governmentcould play a very importantrole.If taxes are reduced,then the chances ofrivalry will
Economic => As a food loving nation more and more investors are showing interestin investing in this business.
Social => Controversies such as “All the earning from McDonald's go into Israel’s pocket” is a common rivalry
tactics that is being used againstthem.
Technological => Technologyhas made it possible for competitors to affectively reduce cost,therefore enabling them
to match each other and imitate others competitive advantage.This increases the rivalry between competitors.
34. Market Research and Analysis
Market research and analysis is conducted in-house and is also being outsourced to companies such as AC Nielson
etc depending on their creditability in the market. The outsourced research firm is given the job of finding outthe
brand value, quality, hygiene, perceived value etc. The research need also arises atopening ofnew outlets or launch
of new products (Meals) or new campaigns.
35. The Comparative AssessmentofCompetitors (Numerical Presentation)
36. Strategic Markting
The Comparative AssessmentofCompetitors (Numerical Presentation)
37. Key Driving Forces Affecting the Industry
Key Driving Forces Affecting the Industry
o The Internet and new E-Commerce opportunities
o Increasing globalization ofthe industry
o Product Innovation
o Technological Change
o Entry or Exit of major firms
o Changes in costand efficiency
o Regulatoryinfluences and governmentpolicychanges
o Changing societal concerns,attitudes and lifestyles
38. McDonald’s SUSTAINABLE COMPETITIVE ADVANTAGE
What makes itstill strong and ranked among the top business concerns is its core competences both internallyand
externally and its sustainable competitive advantages.SCAis the advantage a companyhas which is difficultor
impossible for other companies to possess or break through.
Strong Brand Image
39. Strategic Marketing
40. Customer Analysis
McDonald's emphasizes a lotof focus on buyer behavior.It usuallyasks the following questions in order to
understand the marketbetter.
Who is in the marketand what is in extent of their power with regard to the organization?
What do they buy?
Why do they buy?
Who is involved in buying?
How do they buy?
When do they buy?
Where do they buy?
41. Buying Behavior
42. Market Segmentation,Targeting and Positioning
McDonald's limits itselfto chicken and beef offerings and has also started catering to sea related food. This
enables McDonald's Pakistan to divide its segments on certain principles.As far as segmentation is
concerned,McDonald's makes combination ofdemographics,geographic,behavioral and psychograp hics
segmentation to identify various segments:
o Geographic Segmentation-
o Demographic segmentation-
o Behavioral/Psychographic Segmentation
43. Market Positioning
In Pakistan and also all over the world,McDonald’s primaryfocus is for families with kids and has positioned itselfin
the minds ofkids as a play place,where they can have fun and food together.
In the mind of adults and teenagers ithas positioned itselfas the bestfastfood restaurant.
44. Product Portfolio
Cash Cow:Spicy McCrispy Chicken Deluxe
Question Mark: Happy Meal.
Dog: Quarter Pounder – Beef
45. Product Line
46. Health Considerations:
Considering the healthyeating trends McDonald's has started to publish nutrition figures which helps in
educating its customer aboutwhatthey eat and what impactdoes thatfood would have on their health.
McDonald's also wants to inform their customer thatthey are really concerned abouttheir customer health.
47. Launching A Product
McDonald’s usuallyrelies on the below characteristics while launching its campaigns or products in the market.
48. Campaign Based Launches:
McDonald's regularlyintroduces new innovative deals which as per McDonald's are their “Campaign
Based Launches” which can further be divided into Product Based Campaigns and Brand Based Campaigns.As the
name suggests PBC are introduced on a launch of a new productor deals or on running meals.BBC is usu ally
launched in order to enhance the brand image ofMcDonald's.
o For better understanding lets review a live example.McDonald's launched its HitOffer Campaign all over
Pakistan in which they were offering a spicy chicken burgers + drink for only Rs.95.
49. New Product Strategies
Innovator or Follower?
McDonald's takes an innovative approach towards its productdevelopmentand is notscared of experimenting
in the market.According to the statistics gathered theyhave a success ratio ofabove 95% considering their product
launches in Pakistan.
It was one of the pioneers who partnered with labels in bringing English movies.Movies such as Shrek, Madagascar
2, Ice Age 3 were formallyintroduced by McDonald's in Pakistan.
McDonald's stronglybelieves thatcollaboration and alliances are very importantfor a brand to move towards
success.For this reason McDonald's has co branded with Ufone,Titan, PIA, Coke, Nescafe etc.
LatestLaunches (from lastyear till the date of publishing ofthis report)
Product Related:4 launches which are:Mozzarella cheese sticks,Chocolate Orange pie,Mango Shakes and new
flavors for McFlurry.
Campaign Related:McDonald's has launched over 50 brand related campaigns in the lastyear which is a
record in itself.It has worked really hard to capture and settle in the minds ofits audience and has also successfully
achieved it. One of the recent campaigns includes its collaboration with a music band named “Call”.The members of
the band are from now on also their brand ambassadors for McDonald's.
51. Approaches to Brand Development
52. Value Proposition
53. Value Proposition
C3 Model of Pricing
55. Factors that Influence the Pricing Strategy
o The firms corporate and marketing objectives
o The firms productrange
o The existence or scope of unique selling propositions
o The nature of market
o Previous Strategies
o Currency fluctuations
o Opportunities ofmarketgrowth
56. Price Quality Relationship
Elements ofthe Promotional Mix
McDonald's pays special attention to all components ofits communication mix to reach customers with 360
degree promotional techniques in costeffective manners.Various economic and value meals offer greater value for
moneyfor the customer.These aspects along with brand image are propagated through four main communication
vehicles:Advertising, PR, CRM, BTL and Event marketing together these four elements along with BTL activation
form the promotional mixof the company.