McDonald's considers introducing healthier menu options in San Francisco. A survey found most respondents prefer fresh, high quality food. A perceptual map showed McDonald's positioned for value but not freshness. When offered 3 new healthy options, less than 60% of respondents would choose McDonald's. Remaining competitive requires improving product quality while maintaining value. Introducing customizable options allows meeting changing tastes while retaining customers.

1. McDonald’s New Menu
Marketing Analytics I
Perceptual Map
Jyoti Swamkar • Mimi Nguyen • Daniela Ulloa • Alessio Zanetto

2. Brand Value
Total Revenue
• US$ 28.1B (2013)
Net Income
• US$ 5.6 billion (2013)
Sales
• Ave. US$ 2.5M per store
• 18% - 40% from food sales
Gross Margin
• 38.3% (June 2015)
Channels
• 36,000 outlets serve 69M
customers each day in over 100
countries.
Brand Value
• US$ 34.7B
Consumer Perception Ranking
• 85th place (Forbes)
McDonald’s still holds the largest
market share ~17%, and remains
the most successful fast-food chain
worldwide.

3. https://drive.google.com/file/d/0Bwv0Irjw9YDgOG8wX2g2SGVDWW8/view?usp=sharing
http://marketrealist.com/analysis/stock-
analysis/consumer/restaurants/charts/?
featured_post=35362&featured_chart=35361
82% revenues
from real estate;
18% from food
sales
60% revenues
from real estate;
40% from food
sales
Europe 2012 U.S. 2012
Business
Model

4. STRENGTH
OPPORTUNITY
WEAKNESS
Brand. Global brand, industry leader. Largest
market share ~17%
Biz Model. Shared risks spread worldwide
between management, franchisees and suppliers.
Maximized & optimized system for training and
execution to scale growth.
Resources. Real estate portfolio, IP / trademark.
Diverse Value. Variety of international dishes,
and low-cost menu attract mass market.
Personalize Food. Build your burger kiosks.
Technology. Mobile order and pay; web order for
pickup or delivery.
Localism. Regional menu, e.g. organics, healthy.
Re-imaging. Modernize restaurants’ look.
Social Responsibility. More awareness around
charitable programs to look progressive.
Market Development in emerging markets.
Intense Rivalry. Saturated market.
Socio-Cultural Factors. Shifting consumer
preferences, and info & reviews via the internet.
Economic Factors. Increased costs for
commodities, wage dispute, exchange rates,
austerity measures.
Political. Levies, regulations, conflicts abroad.
Environmental Factors. Climate change,
packaging
Losing Market Share. 30% profit loss 2014
Poor Reputation. Junk food, mistrust,
Supersize Me, Fast Food Nation.
Low Differentiation. Low-cost & convenience
seen as commodity. Quantity for price rather
than quality for price.
Bloated Menu. increases costs and slow down
down service.
THREAT
INTERNAL
E
X
T
E
R
N
A
L
SWOT

5. Buyer Power
Potential
Entrants
Supplier
power
Competitive
Rivalry
Threat of
Substitute
Porter’s 5
Forces Analysis
HIGH
• intense price-driven
• low differentiation
• saturated market
• diverse players
• 8.6% industry growth
• capacity increase
HIGH
• buyer volume
• viable substitutes
• switching costs
• price sensitivity
MEDIUM
• capital expenditures
• economies of scale
• cost advantage
• brand equity
• regulations
• retaliation
HIGH
• variety of choices
• perceived differentiation
• quality
• switching costs
MODERATE
• viable substitute
• effective distribution
• differentiation

6. Would 60% of the respondents in San Francisco
consider McDonald’s if it introduces 3 healthy
new menu options?
o Minimum of 3 menu options are rated
60% or higher by respondents
New Menu
• Black Bean Burger
• Quinoa Kale Salad
• Tofu Lettuce Wrap
• Apple Celery Smoothie
• Minestrone Soup
• Tomato Mozzarella Panini
• Mushroom Spinach Omelet

7. Solution
Process
Selection
Criteria
•Secondary
Research to
determine
healthy/ organic
criteria
Market Survey
•Primary Research
•Survey 1: List Top
6 criteria
•Survey 2:
•Rate McDonalds
and its
competitors on
the criteria
•Gauge
acceptance rate
of new menu
options at
McDonalds
Spreadsheet
Graphing
•Collecting survey
results
•Determining
Calibration
Procedure
•Plotting
Perceptual Maps
Spreadsheet
Formatting
•Outline the axis
and adding data
labels to make the
perceptual maps
readable
Results and
Interpretation
•Should
McDonald's grow
in Health/ Organic
food segment in
San Francisco?
•Conclusions

8. Research
Method
Sources
o American Customer Satisfaction
Index
o Journals
Findings
o Fast-Food Customer Perception
Benchmark
o Customer Satisfaction
o Developing Trends Towards
Fast-Casual
Final Criteria
o Freshness
o Taste of Products
o Quality of Service
o Speed of Service
o Food Quality Level
o Cleanliness
o Product Value

9. First
Survey Questions

10. Primary
Research -1
First Survey Results
Over 50
25 to 50
18 to 25
15
1
Criteria Average
Freshness 9.49
Food quality level 9.43
Cleanliness 9.14
Taste of products 9.11
Quality of service 8.65
Product value 8.32
Friendliness of staff 8.30
Speed of service 8.03
Price 7.49
Food quantity level 7.27
Operation hours 7.03
Restaurant location 6.97
Variety of products 6.73
Food presentation/display 6.73
Customized menu 6.70
Brand value 6.68
Nutrition label 6.51
Restaurant layout 6.14
History behind ingredients 5.95
Social/online trend 5.76
Brand history 5.03
Restaurant size 4.27
❑ 100% of respondents are
aware of healthy/
organic food
❑ 87% eat organic food
more than once a week
❑ Top 6 criteria
according to the
respondents are
determined
❑ Respondents mostly
belong to the age group
25-50
❑ Next Steps rate
McDonald’s vs.
competitors on criteria

11. Second
Survey Questions
Survey Results &
Perceptual Map Model

12. Perceptual
Map
Low
Product
Value
High
Product
Value
Burger King
Super Duper
Panera Bread
Starbucks
In n Out
Burgers Chipotle
Very CleanNot Clean
McDonald's
Low
Product
Value
High
Product
Value
Burger King
Super Duper
Panera Bread
Starbucks
In n Out
BurgersChipotle
Very TastyNot Tasty McDonald's
McDonald's to
be
Product Value
Taste of Product,
Freshness,
Food Quality
Cleanliness
Service Quality
McDonald’s moves to
the more tasty, higher
product value segment
ASSUMPTION

13. New Menu
at McDonald’s
❑ We asked respondents if they
would accept at least 3 new
❑ menu items at McDonald’s
Possible Reasons for Low Acceptance
DemographicsBehavior Pattern

14. Market Comparison
Location - Category - Channel
• 8 stores
• Fast food
• Franchises and company owned
• 11 stores
• Fast food
• Franchises and company owned
• 2 stores
• Fast casual
• Franchises and company owned
• 50 stores
• Fast casual
• Licenses and company owned
• 6 stores
• Fast casual
• Company owned
• 1 store
• Fast casual
• Company owned
• 9 stores
• Fast casual
• Company owned

15. Market Comparison
Price - Product
Target market - Objective
• Target: people looking for fast and affordable meal
• Objective: reasonably priced quality food, served
quickly, in attractive and clean surroundings
• Target: family, business people, blacks and hispanics
• Objective: cheap, fast, convenient food with
memorable customer experience
• Target: urban workers and suburban dwellers
• Objective: authentic and fresh artisan bakery in a
quick service menu selection
• Target: young urban adults and tourists
• Objective: not only coffee, but a whole experience
around quality treats
• Target: professionals, commuters, tourists, students
• Objective: superior quality, environmental
conscious, great experience
• Target: family, young singles, tourists, students
• Objective: fresh, made-to-order food prepared and
served by friendly, well-trained people
• Target: millenials (15-35 years old)
• Objective: provide food with integrity

16. Perceptual Map What If? Result
Burger King releases a new menu
line centered around “freshness”
e.g. Vegetable & Fruit smoothies,
Tofu Burgers, Sweet Potato Fries
Burger King &
McDonald’s align
(look at data)
McDonald’s chooses to fully dive
into the healthy & organic market
based on segmentation
McDonald’s will
lose core segment
that aligns with
convenience and
favors “unhealthy”
as a result of
shifting into a
different market
New competitors come into the
market & deliver a fast-casual
option for McDonald’s core market
Scenarios
Threat of New
Entrants
Market Place
Disaster
Intensity of
Rivalry
STORE

17. Insights
• Customers may not eat at McDonald’s even if it introduces healthier
menus
• McDonald’s strengths lies in product value & needs to maintain its position.
• Burger King is too close to McDonald’s which is a potential threat.
• More representation from lower income household in primary research
• Food freshness is a growth opportunity in San Francisco
Conclusion
• McDonald’s should increase focus on product rationalization
• Allowing customers to personalize their food, e.g. build your own burgers, is
an opportunity to improve its product offerings.

18. Thank you for your attention