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Mc donalds at pakistan


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Mc donalds at pakistan

  1. 1. Mc DonaldsPakistan (Presence & Competition) - Presentation Transcript 1. STRATEGIC MARKETING MANAGEMENT AND THE CASE OF McDONALD’S IN PAKISTAN Presentation Strategic Marketing 2. Mr. Jamshed AhmedSTRATEGIC MARKETING MANAGEMENT Spring 2010Szabist Strategic Marketing 3. Group Members Muffadal Ali (0935109) Hussain Khairi (0935105) Muhammad Jaber Haqqani (0935111) Shaikh Faizan Ahmed (0935117) Syed Anser Ahmed (0935121) Rizwan Saleh (0935124) Strategic Marketing 4. Contents Competitor/EnvironmentAnalysis Introduction 1 5 McDonald’s Pakistan Key Driving Forces 2 6 Vision,Mission & Objectives Customer Analysis 3 7 Market Audit & SWOT Analysis Market Segmentation,Target& Positioning 4 8 Strategic Marketing 5. Contents Product Portfolio Pricing 10 9 Distribution & Promotion McDonald's Financials 11 12 ManagementControl & Corrective Actions Conclusion 13 14 References 15 Strategic Marketing 6. FAQ’s WHY DID McDonald's CLOSED ITS OPERATION AT DO TALWAR & NAZIMABAD? REVENUE ? Strategic Marketing 7. Introduction History > 1954 – 1955 > 1965 – 1973 > 1974 – 1993 Business Model > 15% restaurants companyowned
  2. 2. > 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 Strategic Marketing 8. Competition > 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 Strategic Marketing 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 Revenue Strategic Marketing 10. Industry Life Cycle Market growth rate 13% - 14% per annum. Core competencies > Delivery speed > Customer care > Cleanliness Strategic Marketing 11. Vision,Mission and Objectives McDonald’s Vision "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 smile." McDonald's Mission “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”. Strategic Marketing 12. Vision,Mission and Objectives The Planning and Implementation Matrix Strategic Marketing 13. Objectives o Long term Growth o Competitive position o Market Developmenteffort Strategic Marketing 14. Strategies Differentiation 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
  3. 3. 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) Flexibility. Strategic Marketing 15. Strategic Marketing 16. Market Auditing & SWOT Strategic Marketing 17. Contd… Strategic Marketing 18. Strategic Marketing The Opportunity Matrix The Threat Matrix Contd… 19. SegmentAnalysis Strategic Marketing 20. Competitor Analysis McDonald's doesn’tbelieve that it has a directcompetition because the marketis segmented on a much diversified basis. They are of the pointthat food industryis the only industry where it is very difficult to alter the taste buds of a customer. Strategic Marketing 21. Contd….. Strategic Groups Strategic Marketing 22. Contd….. Strategic Marketing 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. Strategic Marketing 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. Strategic Marketing 25. Contd….. 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. Strategic Marketing 26. Contd….. 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 generate.
  4. 4. > PEST forces such as increasing population is an appealing opportunity,however, the economic situation of the region brings along adverse effects on the industry. Strategic Marketing 27. Contd….. 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 power. Technological => The advancementin technologymakes itpossible for the buyer to gather all the information quickly and make informed decisions. Strategic Marketing 28. Contd….. 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. Strategic Marketing 29. Contd….. PEST forces > 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. Strategic Marketing 30. Contd….. 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 company. > McDonald's has to importthe food related raw materials as no Pakistani companycan match their standards. Strategic Marketing 31. Contd….. 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 them. 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. Strategic Marketing 32. Contd….. Rivalry among existing competition > The rivalry amongstthe existing firms is moderate to high. > The marketshare for each of them is deteriorating. Strategic Marketing 33. Contd….. Political => The governmentcould play a very importantrole.If taxes are reduced,then the chances ofrivalry will
  5. 5. increase further. 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. Strategic Marketing 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. Strategic Marketing 35. The Comparative AssessmentofCompetitors (Numerical Presentation) Strategic Marketing 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 Strategic Marketing 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. McDonald's SCAare: Strong Brand Image Flexibility Strategic Marketing 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? Strategic Marketing 41. Buying Behavior Strategic Marketing 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:
  6. 6. o Geographic Segmentation- o Demographic segmentation- o Behavioral/Psychographic Segmentation Strategic Marketing 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. Strategic Marketing 44. Product Portfolio Strategic Marketing Star: Fries. Cash Cow:Spicy McCrispy Chicken Deluxe Question Mark: Happy Meal. Dog: Quarter Pounder – Beef 45. Product Line Strategic Marketing 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. Strategic Marketing 47. Launching A Product McDonald’s usuallyrelies on the below characteristics while launching its campaigns or products in the market. Strategic Marketing 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. Strategic Marketing 49. New Product Strategies o Segment o Trend o Competition 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. Co Branding 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. Strategic Marketing 50. Contd 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.
  7. 7. 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. Strategic Marketing 51. Approaches to Brand Development Brand Mapping Strategic Marketing 52. Value Proposition Strategic Marketing 53. Value Proposition Strategic Marketing 54. PRICING McDonald's CostDetermination C3 Model of Pricing o Costs: o Competitors: o Customers: Strategic Marketing 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 Strategic Marketing 56. Price Quality Relationship Strategic Marketing 57. PROMOTION 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. Strategic Marketing