Mc donalds123

Mc donalds123

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  McDONALDS The story ofMcDonald’s started in 1954, when its founder Raymond Kroc saw a hamburger stand in San Bernardino, California and envisioned a nationwide fast food chain. Kroc proved himself as a pioneer who revolutionized the American restaurant industry. McDonald's, the world's largest chain of fast-food restaurants, has been treating the Ukrainians with its famous burgers and sandwiches since 1997. The first McDonald's restaurants were a real sensation, customers traveled kilometers to visit them. Nowadays there are about 50 McDonald's restaurants in 16 Ukrainian towns, and more than a dozen of McDonald's restaurants are in Kiev. As well as in countries of all around the world, the fast-food giant McDonald's in Kiev offers food of a high standard, quick service and value for money. To treat the customers with tasty food they expect from McDonald's, it purchases supplies from local producers wherever possible and carefully monitors every detail of production, transport, delivery, preparation and service. Offering choice and variety to its customers, McDonald's restaurants provide an extensive menu that includes salads, grilled or crispy chicken, hamburgers and cheeseburgers, sandwiches, fries, ice-cream, delicious desserts, soft drinks and coffee. To cater for the most different tastes the flexible menu regularly rotates and is often enriched with new dishes. Come and taste - McDonald's have always something new to offer. At the entrance to the restaurants the life-size statues of the smiling, friendly clown Ronald McDonald, children like to shake hands with, greet customers. By the way, children are especially welcome at all McDonald's restaurant. Bright interiors, modern playground and tasty dishes attract kids of different ages. Happy Meal, that contains food and a free toy, both of which are usually contained in a small takeaway box with the McDonald's logo, is a good small present that will gladden any child. And the last, McDonald's can be recommended as an effective remedy for nostalgia - no matter how far from America or Europe you get, it is a McDonald's with its casual environment and familiar and deer cuisine that makes you feel a little closer to home. Today McDonald’s is the world’s largest fast food chain serving 47 million customers daily. McDonald’s is now one of the most valuable brands globally, worth more than $25 billion. 1
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  Year Events 1955 Ray Kroc opens his first restaurant. McDonald’s Corporation is created 1957 Quality, Service, Cleanliness and Value (QSC & V) becomes company motto 1963 Ronald McDonald makes debut 1965 The company goes public 1968 Big Mac is introduced` 1974 Happy Meal is launched 1996 McDonald’s opens in India, the 95th country Business Model  Franchise Model – Only 15% of the total number of restaurants are owned by the Company. The remaining 85% is operated by franchises. The company follows a comprehensive framework of training and monitoring of its franchises to ensure that they adhere to the Quality, Service, Cleanliness and Value propositions offered by the company to its customers. McDonald’s in India McDonald’s entered India in 1996. McDonald’s India has a joint venture with Connaught Plaza Restaurants and Hard Castle Restaurants. Connaught Plaza Restaurants manages operations in North India whereas Hard Castle Restaurants operates restaurants in Western India. Challenges in Entering Indian Markets  Re-engineering the menu - McDonald’s has continually adapted to the customer’s tastes, value systems, lifestyle, language and perception. Globally McDonald’s was known for its hamburgers, beef and pork burgers. Most Indians are barred by religion not to consume beef or pork. To survive, the company had to be responsive to the Indian sensitivities. So McDonald’s came up with chicken, lamb and fish burgers to suite the Indian palate. 2
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   The vegetariancustomer – India has a huge population of vegetarians. To cater to this customer segment, the company came up with a completely new line of vegetarian items like McVeggie burger, veg surprise and McAlooTikki. The separation of vegetarian and non-vegetarian sections is maintained throughout the various stages.  “Mc Donald’s mein hai kuch baat” projects McDonald’s as a place for the whole family to enjoy. When McDonald’s entered in India it was mainly perceived as targeting the urban upper class people. Today it positions itself as an affordable place to eat without compromising on the quality of food, service and hygiene. This commitment of quality of food and service in a clean, hygienic and relaxing atmosphere has ensured that McDonald’s maintains a positive relationship with the customers. Customer Perception and Customer Expectation Customer perception is a key factor affecting a product’s success. Many potentially revolutionary products have failed simply because of their inability to build a healthy perception about themselves in the customers’ minds. McDonalds being an internationally renowned brand brings with it certain expectations for the customers. Target Segment What is McDonald’s for me? A Family with children A treat to children, a fun place to be for the children. Urban customer on the Great taste, quick service without affecting the work move schedule Teenager Hangout with friends, but keep it affordable. McDonalds Marketing Mix (5 P’s) After segmenting the market, finding the target segment and positioning itself, each company needs to come up with an offer. The 5 P’s used by McDonalds are: 1. Product 2. Place 3. Price 4. Promotion 5. People 3
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  Product: How shouldthe company design, manufacture the product so that it enhances the customer experience? Product is the physical product or service offered to the consumer. Product includes certain aspects such as packaging, guarantee, looks etc. This includes both the tangible and the non-tangible aspects of the product and service. McDonalds has intentionally kept its product depth and product width limited. McDonalds studied the behaviour of the Indian customer and provided a totally different menu as compared to its International offering. It dropped ham, beef and mutton burgers from the menu. India is the only country where McDonalds serve vegetarian menu. Even the sauces and cheese used in India are 100% vegetarian. McDonalds continuously innovates its products according to the changing preferences and tastes of its customers. The recent example is the introduction of the Chicken Maharaja Mac. McDonalds bring with it a globally reputed brand, world class food quality and excellent customer specific product features. Place: Where should be the product be available and the role of distribution channels? The place mainly consists of the distribution channels. It is important so that the product is available to the customer at the right place, at the right time and in the right quantity. Nearly 50% of U.S.A is within a 3 minute drive from a McDonald’s outlet. There is a certain degree of fun and happiness that a customer feels each time he dines at McDonalds. There are certain value propositions that McDonalds offer to its customers based on their needs. McDonalds offers hygienic environment, good ambience and great service. Now McDonalds have also started giving internet facility at their centres and they have been playing music through radio instead of the normal music. There are 4
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  certain dedicated areasfor children where they can play while their parents can have some quality time together. Price: What should be the pricing strategy? Pricing includes the list price, the discount functions available, the financing options available etc. It should also take into the consideration the probable reaction from the competitor to the pricing strategy. This is the most important part of the marketing mix as this is the only part which generates revenue. All the other three are expenses incurred. The price must take into consideration the appropriate demand-supply equation. McDonald’s came up with a very catchy punch line “Aap ke zamane mein ,Baap ke zamane ke daam”. It also came with the advertisement of coming up with items at a price of only Rs 20 which is very economical for a customer. Thus this lead to repeated purchase as with price one also get the quality and service.This was to attract the middle and lower class consumers and the effect can clearly be seen in the consumer base McDonalds has now. McDonalds has certain value pricing and bundling strategies such as happy meal, combo meal, family meal etc to increase overall sales volumes. Mcdonald has gone for penetration pricing with introductory new meal at lower price. Promotion: What is the suitable strategy and channels for promotion of the product? 5
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  The various promotionchannels being used by McDonald’s to effectively communicate the product information are given above. A clear understanding of the customer value helps decide whether the cost of promotion is worth spending. There are three main objectives of advertising for McDonald’s are to make people aware of an item, feel positive about it and remember it. The right message has to be communicated to the right audience through the right media. McDonald’s does its promotion through television, hoardings and bus shelters. They use print ads and the television programmes are also an important marketing medium for promotion. Some of the most famous marketing campaigns of McDonald’s are: • “Aap ke zamane mein ,baap ke zamane ke daam”.” • “I’m loving it”. It has done promotion in many other ways like toys with meals for kids and also promoting through banners and leaflet etc. People: How to converge the benefits of internal and external marketing? McDonald’s understands the value of both its employees and its customers. It understands the fact that a happy employee can serve well and result in a happy customer. McDonald continuously does Internal Marketing. This is important as it must precede external marketing. This includes hiring, training and motivating able employees. This way they serve customers well and the final result is a happy customer. The level of importance has changed to be in the following order (the more important people are at the top): 1. Customers 2. Front line employees 3. Middle level managers 4. Front line managers The punch line “I’m loving it” is an attempt to show that the employees are loving their work at McDonalds and will love to serve the customers. Relationship with the Suppliers McDonald’s has changed the nature of not only the food service industry but also the food processing industry as well. McDonald’s realized that the battle between fast food chains would increasingly be one of efficiency of supply, lower cost production and greater desire to innovate. It pioneered with innovative and sophisticated food distribution and packaging systems when the traditional food processors were unwilling or unable to supply food items that McDonald’s demanded. They achieved amazing consistency by devoting more attention than anyone else to field service and training at store level. Production was concentrated in huge plants devoted exclusively to McDonald’s. McDonald’s also started with tiny suppliers and grew with them displaying great loyalty. 6
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  Nowhere is thesupplier loyalty more evident than in development of new, improved products. Some of McDonald’s classic food items like Filet-o-Fish, French Fries, Chicken Nuggets etc. are results of supplier innovation. Interestingly, it took KFC more than three years before in finally introduced its own version of chicken nuggets. Thus supplier technological expertise had given McDonald’s a product which was not a mere marketing innovation but a technical one. McDonald’s attempted to squeeze labour out of the stores by moving more preparation back into the processing plant, creating the opportunity to develop unique products based on suppliers’ processing skills. For the first time, McDonald’s suppliers became the focal point of new product development. This converted the fast-food industry’s most fragmented distributed system into more efficient one which helped McDonald’s reduce its inventory and manage costs effectively. Importance of PLC in McDonalds The requirements of customers change over time and thus the product offering has to be changed accordingly. What is the fashion today may be out of market within few weeks. Thus continuous innovation is required. To counter these changes McDonalds has continuously introduced new products and has phased out the old ones which were at the decline stage of their PLC. The introduction is timed such that the new product does not cannibalize the product already in the maturity or growth stage. Thus the secret lies in getting profits with different products in the different stages of the PLC. 7
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  A perfect exampleof revitalising a product in decline phase The French Fries have been an important part of the McDonalds menu worldwide. But now it was in the stage of decline and was actually not generating proper return. In an attempt to revitalize it, a new variant was introduced namely SHAKE SHAKE FRIES. This is being served with chatpata spice mix which has resulted in increase in the sales of French Fries and has elevated it from to the decline stage. This is used to delay the decline of a well established product which has the potential of generating further revenue. Competitors Analysis McDonald’s has been a leading fast-foods outlet. But the outlet understudy has other competitors eating away into its market share. In addition to its traditional rivals—KFC, Dominos, Pizza Hut—the firm encounters new challenges. Jumbo King competes using a back-to-basics approach of quickly serving up burgers for time-pressed consumers. On the higher end, the KFC has become potent competitor in the quick service field, taking away customers from McDonald’s. Perhaps in the new environment, fast, convenient service is no longer enough to distinguish the firm. At this time, a new critical success factor may be emerging: the need to create a rich, satisfying experience for consumers. This brings us to service and experience based competition which McDonald’s can use for competitive advantage against Jumbo King. Keeping in mind the demographics of the area, McDonald’s has Wi-Fi enabled the outlet to cater to the student community. It is for this overall “Food, Fun & Folks” experience that customers pay a premium over the other competitors. Competition also reduces product lifecycle; inducing firms to revise their products portfolios and to revisit their product market to understand changing needs, expectations and perception of different market segments. The new McBreakfast would be introduced between 6 to 11 am as a pilot project. This would open up a whole new revenue stream for McDonald’s by tapping into the student and working population by providing a healthy and wholesome breakfast. This shows how demographic shift can affect the demand for products and services. McDonald’s has anticipated these changes to maintain its competitive edge. 8
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  Two Dimensional PerceptualMapping BCG matrix of McDonald’s The need for strategy in order to expand its existing product in very promising markets for McDonald’s is very essential. McDonald’s along with KFC and other major fast food chains have dominated the American continent as well as elsewhere. BCG Matrix: The market growth rate measures industry attractiveness. The underlying theory for examining market growth rate is the industry life cycle. The BCG assumes that growth rates, life cycle stages affect a firm’s finances. McDonalds Europe ? QUESTION MARKS STAR McDonald’s USA McDonald’s Asia(india) DOGs CASH COWS Mcdonalds America 9
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  Placing products inthe BCG matrix results in 4 categories in a portfolio of a McDonalds: 1. Stars (=high growth, high market share) • Frequently roughly in balance on net cash flow. However if needed any attempt should be made to hold share, because the rewards will be a cash cow if market share is kept. So, McDonald’s USA is under Star position. 2. Cash Cows (=low growth, high market share) • Profits and cash generation should be high, and because of the low growth, investments needed should be low. Keep profits high. 3. Dogs (=low growth, low market share) • Avoid and minimize the number of dogs in a company. • Beware of expensive ‘turn around plans’. 4. Question Marks (= high growth, low market share) • Have the worst cash characteristics of all, because high demands and low returns due to low market share Porter 5 forces model 10
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  Competition Restaurant industry ishighly competitive industry. There are many small fast food businesses in the industry who fight with each other to improve their customer base; McDonalds is not an exception to this. Since its establishment in 1940, MCD has excelled in the sector. Nevertheless, to stay in the competition, it started with McCafé. This helped the company to stay in the business as a major fastfood business. Another major step came out when McDonald started Breakfast to compete with the existing business serving breakfast. Hence, this industry is extremely competitive and the MDC should be up to date with customer taste & preferences The Threat of Entrants Large established companies with strong brand identities such as burger king, subway, wendy etc do make it more difficult to enter and succeed within the marketplace; new entrants find that they are faced with price competition from existing chain restaurants. Bargaining Power of Buyers Low bargaining power of buyers. Bargaining power of suppliers Bargaining power of suppliers within the fast food industry would be relatively small, unless the main ingredient of the product is not readily available. Suppliers are Coca cola, Heinz etc. Threat of Substitutes This could range from a competitive fast food restaurant to family restaurant to a home cooked meal. Some of the restaurants like Ruby Tuesday,Yo china and TGF 11
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  Mcdonalds Value chain PESTELFramework: Political: • The international operations of McDonald’s are highly influenced by the individual state policies enforced by each government. Economic: • McDonald’s has the tendency to experience hardship in instances where the economy of the respective states is hit by inflation and changes in the exchange rates. • Market leader. • Low cost and more incomes. • The rate at which the economy of that particular state grows determines the purchasing power of the consumers in that country. Social: • Working within many social groups. • Increase employments. 12
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  Technological • Advanced technologydevelopment. • Quality standards. Environmental: • Quality packing. • Local manufacturer using foreign supplies. Legal: • Legislation for product. • Sustained logo SWOT Analysis The Road Ahead Rolling out McBreakfast across all outlets – In India, the company has recently launched its entry into the breakfast food category. This is now launched on a pilot basis on select stores. The company views this category as a key growth driver in future. Mcdonald should increase its product line. To have more variety to choose from, to include more deserts and more items like Pizza McPuff. It should continue to provide 13
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  better and quickservice. By lower the supply chain cost so that it helps in cost reducing. McDonalds is willing to expand their Happy Meal choices to attract and retain customers. 14