Background:-

McDonald's business began in 1940 as a restaurant opened by two brothers, Dick and Mac McDonald in San Bernardino, California. The founding of the present day McDonald's Corporation dates back to April 15, 1955 when a franchised restaurant was opened by Ray Kroc in Illinois. Kroc was responsible for leading the corporation to worldwide expansion. McDonald's became a public corporation, listed on the stock market in 1965. McDonald's eventually has dominated the fast food industry for years as the market leader. It is one of the world's largest chain of fast food restaurants, found in 119 countries with over 31,000 restaurants worldwide and more than 1.5 million employees. The chain serves about 47 million customers a day. McDonald's primary products include hamburgers, cheeseburgers, French fries, soft drinks, breakfast items, and desserts. It has recently added to its menu coffee, salads, wraps, and fruit. McDonald's earns revenue in several roles�as a franchiser of restaurants, operator of restaurants, and investor in properties. Nearly 15% of McDonald's restaurants are owned and operated by the company directly. The remainder of the restaurants, about 85%, are operated by others through franchise agreements and joint ventures.


1. Executive summary

This assignment will focus on a brand and product line extension of McDonald's Restaurant. Every year McDonalds produces some new food products for the variation of the customer choice . Here I want to introduce a new product named " Vegitable chicken Burger '' . I have targeted three months sale from January to march in 1300 McDonalds outlets in England to see the UK market value of this product. The primary marketing objective is to achieve a three month UK McDonald's market share of Minimum two percent with unit sales per day 30 unit in each restaurant. If per burger price imagine �2.99 so 1300 restaurant sale value is �1,16610 per day. The primary financial objectives are to achieve three months sales revenue of �10,494,900in uk. If I will successes of new product line extension so I can continue a year.

2. Situation analysis

The situation analysis describes the market, the company's capability to serve targeted segments, and the competition.

McDonalds is the no: 1 fast food chain stores with a 40 million customers visiting it per day. It has over 30,000 branches in 120 countries. It derives 80% of its revenues from eight countries like Canada, Brazil, Germany, France, Japan, UK, Australia and US. The greatest strength was creating an image in the minds of the people and introducing them to the fast food culture. Delivery speed, customer care , value and cleanliness are the core strengths. McDonalds created a corporate symbol and their advertisement campaigns were highly successful in establishing the brand image and logo in the minds of the millions.

Our Two main competitors generally identified with McDonalds are the Burger King and the KFC. McDonalds marketing strategy is concerned with the internal resources and external environment. But my new product 'vegetable chicken burger' are not facing competitor exiting product line so I can established without completion and monopoly marketing strategy can be used appropriately.

2.1 Market summary

Market summary includes size, needs, growth and trends. As a food industry McDonalds has continually observed to the customer tastes, value, lifestyle, language and perception. To build long-term business, it is essential to retain people once they have become customers.

Customers are not all the same. Market research identifies different types of customers. For example:

A parent with two children Visits McDonald's to give the children a treat.

Children Want to visit McDonald's as it is a fun place to eat.

A business customer Visits McDonald's during the day as service is quick, the food tastes

great and can be eaten in the car without affecting a busy work schedule.

Teenagers Are attracted by the Saver Menu which is affordable, and the internet access available in restaurants.

These examples represent just a few of McDonald's possible customer profiles. Each has different reasons for coming to McDonald's .Using this type of information McDonald's can tailor communication to the needs of specific groups. It is their needs that determine the type of products and services offered, prices charged, promotions created and where restaurants are located.

In order to create a marketing strategy that will enable the needs of the key market to be met, the strengths and weaknesses of the organisation must first be identified and analysed.


2.2 Strengths

Strengths are internal capabilities that can help the company reach its objectives McDonalds has strong cash flow and ranks highest of the fast food industry for good innovation and product development. It continually innovates to retain customers in the business. In 'vegetable chicken burger' customer get different combination taste . My new product offers well established consumer testing panel, consumers choice, reasonable value and great service. Its specially for family , children, and young generation who loves chicken with vegetable.

Weaknesses

weakness are internal elements that may interfere with the company's ability to achieve its objectives. Product line heavily focused towards hot food and burgers. Fat and carbohydrate margin level harmful for health. My products successes depend of the customer satisfaction and happiness. Discussing about product weakness I have to tell the weakness of company as well. They have yet to capitalize on the trend towards organic foods.

Question over franchising leads to loss of control and quality. Their most of the food is seasonal.

Opportunities

Opportunities are areas of buyer need in which the company might perform profitably. For establishing 'vegetable chicken burger' UK market is a big opportunity for multicultural consumer. McDonalds now joint ventures with retailers (e.g. supermarkets). Respond to social changes - by innovation within healthier lifestyle foods. Its move into hot baguettes and healthier snacks (fruit) has supported its new positioning. The new "formats", McCafe, having Wifi internet links should help in attracting segments. Also installing children's play-parks and its focus on educating consumers about health, fitness. Continued focus on corporate social responsibility, reducing the impact on the environment and community linkages. International expansion into emerging markets of China and India.

Threats

Threats are challenges posed by an unfavourable development that could lead to lower sales and profits. Major competitor planning to integrate vertically and sell direct to the consumer .Social changes - Government, consumer groups encouraging balanced meals, 5 a day fruit and vegetables. Focus by consumers on nutrition and healthier lifestyles. Competitive pressures on the high street as new entrants offering value and greater product ranges and healthier lifestyles products. E.g. subway, supermarkets, M&S. Environmental Pressure groups .


2.3 Competition

This section identifies key competitors, describes their market positions and strategies. There are so many competitors of McDonalds such as Burger King, KFC, Subway, Greges etc but two main competitors of McDonalds are burger king , and KFC.

McDonalds:-Consumer taste preference(promotional foods). Single target audience. Appealing to the kids. Strongly maintain cleaning and hygiene. Maintain timing.

Breakfast menu is very famous.

Burger King:-Burger King cooks theirs using a machine-paced assembly process.

Prices is higher than McDonalds. More appealing to children. Ethnic consumer. They improved chicken and deli equivalent options. Like McDonalds it's a well known company in the world.

Kentucky Fried Chicken :- internationally well known company. Menu not healthier like McDonalds. it's a hot food. They develop their breakfast menu. Use bargain buckets. Appeal to female market and to the families. Quick service. Lack of menu diversity.


2.4 Product offerings

McDonalds existing products offering are:-

Beef Section: - Hamburgers, cheeseburgers, Big Mac , Quarter Pounder.

Beef Section Promotional Product are tax-max, Quarter Pounder deluxe with Bacon and without Bacon, Double Quarter Pounder , Big Tasty 'N' , New yoke Supreme, Taxas grand day, Arijona , new orlian, maiami etc.

Chicken Section: -Chicken Sandwich, Mayo chicken, Mcnuggets, Mayo legend, Salsa legend, Chicken Selects , Deli Chilli Chicken, Deli Salad Chicken with out and with Bacon, Salad chicken Grill and Crispy . Fish Fillet, Fish Fingers. Vegetable Deluxe, Spicy Vegetable Deli.

Chicken Section Promotional Product are Chicken Bacon Onion, Snack Mayo wrap, Salsa Snack Wrap, Ceaser Snack wrap, Tikka Snack Wrap, Mozzila Dippers, Onion ring, Cheese Melt.

Fries, shakes milk ( Flavour Chocolate, Strawberry, Banana ), soft drinks ( Coca Cola, , Diet Coke, Zero Coke, Fanta,) , Orange Juice, Fresh- Fruit Juice ,Organic Milk, Tea, Coffee , Hot Chocolate, Latte, Cappuccino, milk, Mcfurry, Sundae.

Others Promotional Product are Wages.

All of the products customers buy as a meals. There are three types of meals in McDonalds- large meal, medium meal, and happy meal for children. As a meals customer get a good price. So I like to extend new product named "Vegetable Chicken Burger" to include the main product line. First year sales revenue are projected to be �33 million, based on sales of 109500000 vegetable chicken burger at a wholesale price of �2.99.

2.5 Distribution:- Distribution explains each channel for the company's product and mentions new developments and trends. In McDonalds , they have got their own distributor. All of the products mainly from America. They distributed their product only of their branches.


3. Marketing Frame work:- McDonalds follow this framework

McDonald's SMART

Strategic

Vision for sustain profitability and competitive advantage

Marketing

Serving the needs and wants of consumer

And

Marketing cannot be separated from research

Research

Links markets to consumers through all information

Marketing Strategy

3.1Objectives

Objectives communicate marketers want to achieve, guide marketing actions , measure well a plan is working and success . McDonald's committed to consistently providing customer with outstanding levels of Quality, Service and Cleanliness and grate value develop QSC. My company existing objective related to market share, sales, reaching the target audience and creating awareness in the marketplace. Company always traditionally start short-term plan objective if it will be success then long-term objective measurable targets uses milestones along the way. This type of feedback allows the company to change plans and allows flexibility. If success then marketing objectives have been established, the next stage is to define goals will be achieved. McDonald's aim to be the UK's best fast service restaurant experience. My product aim for a two percent share with unit sales volume of 109500000 for a year. If I will successes of my new product 'vegetable chicken burger' than I will going for a long term plan to continue this product .

3.2 Market Segmentation of Product " Vegetable Chicken Burger"

All marketing strategies start with segmentation, targeting and positioning. Market Segmentation of Product line" Vegetable Chicken Burger" is going to introduce by McDonald's, uses follow basic some role which company operate , research the needs of customers , characteristic, decision-making process and buying behaviour. McDonalds uses demographic segmentation strategy with age as the parameter. Demographics originates from the word 'demography' which means a 'study of population'. The population can be divided into age, gender, income, and family lifecycle amongst other variables. So customer needs and segment the market and develop profile of resulting Segmentation or customization increase profit opportunities because different group of customers attach different economic or psychological values of the solution offered, and also increase service, quality, efficiency, growth, profitability and effectiveness. McDonald's is highly segmented market so my product offers price comparatively reasonable and different taste , expectation fulfil customer satisfaction. The most common profilers used in consumer market segmentation are

Need Segments Geographic Demographic Psychology Behaviour Competitive Brands
    -Age, Sex, Family, Size     Need Segments
Establisted -Region of the country, -Income, occupation -Social Class, -Product usage:-Low, medium, high -Brand on sale
120 country but need for new region segments Need Segmentsavailability product location Education -lifestyle type - Brand Loyalty very high -Strong competitor of the brand but not my product competition
    -Religion, race, Nationality - Brand Loyalty very high   Need Segments

3.3 Target markets: The main target segments are children , youth and young urban family. For attracting children's McDonalds has happy meal with varieties types of walt disney characters are given. For this children have a tie up with walt disney. It also provides several outlets facilities like 'play place' where children can play arcade games and air hocky etc. their aimed at making McDonalds fun place to eat. Giving this facilities they attract young urban family for waiting to spend some time with their children have fun at the outlet. For teenager, they keep their price reasonable My product 'vegetable chicken burger' will be targeted by McDonalds maintains a positive relationship with the customer and maintain a quality of food and service in a clean, hygiene and relaxing atmosphere.

McDonald's has a great reputation for fast, consistent quality, family friendly food and that's why I targeted family, young generation and older people for my product .Overall any kind of consumer can get a new taste for combination of vegetable with chicken . McDonald's all the time maintain best quality food , clean restaurants for the consumer specially for families expectation and thinking about family and customer I put my products' vegetable chicken burger' price is reasonable .

3.4 Positioning: - Positioning helps to establish product's within the eyes of the purchaser. customers' motivations , requirements, and competitors' actions helps to establish positioning. My product 'Vegetables Chicken Burger' is little bit different in taste from any other restaurant like Burger King , KFC, and subway that why every ages people like to eat this for variation. Mainly the variety seeking consumers will be targeted. And become a slowly increase involvement product 18/24 months. So people seek variety and variation of the product .

3.5 strategies

Product

Product strategies includes decisions about product mix, lines, brands, packaging, and labelling . when offering menu items there is a huge amount of choice available to the potential customers to know how and where they spend their money. Therefore McDonald's now developing menu on the demand of customers. that's why my product 'vegetable chicken burger' I introduce for the variation and requirements of the customer.

Pricing

Pricing strategy covers decisions about setting initial prices but remember

the customer's perception of value is an important cause of the price charged.

Because Customers draw a picture of the value of the product in mentally .It is

important when deciding on the price to be fully aware of the brand and its integrity.

Distribution Distribution is all about getting the product to the consumer. It is of little use advertising something which customers want to buy and then failing to make sure the product is in the correct place.

Promotion McDonalds use a lot of advertising, slogans and memorable tunes to get peoples attention about new products or building that are being brought out. They advertise using television adverts, eye-catching billboards, radio, magazines or newspapers and many more. McDonalds also offer a lot of special offers and sometimes limited offers which they promote often on television and on posters, this helps them attract people who might not usually come to McDonalds but they might have been persuaded by the promotion to check out this new product etc. Also this kind of advertising helps attract the younger or older generation who use public transport, as most of the posters would be advertised on buses, trains etc.

McDonalds have various recognisable advertisements to encourage customers to try out the food. Recently for showing people about their cleaning and cooking process , they have launched an advertisement. They refer has a celebrity boxer exploring to show that they keep the kitchen area very clean. This is good publicity for the customers of McDonalds who may have doubts on how the food of McDonalds is made. The advertisement clearly sends a message across to the viewers that McDonalds is hygiene conscious. This advertisement will help to attract more customers to try out McDonalds have a positive effect on the performance.

Mcdonalds website is also a great promoter because of its brightness and catchy colour with bold text .








The interview was taken between all the age factor, but young generation like McDonalds most.







The above graph indicate that customer how often visit the restaurant .In that graph we have seen that every 3 to 6 months people visiting mostly.

The above graph showing 80% customer are satisfy with McDonalds. This survey proves that it fulfil one of the major objective of Mcdonalds.

This graph represents the thoughts of the consumers on the quality of food. It shows that most of the consumers rate the food as satisfactory.

This graph supplys a good result for McDonalds because 85% customers think that McDonalds prices are of reasonable value, it can gain McDonalds customer loyalty, or make further promotions based on their quality pricing. So my product 'vegetable chicken burger' will be established because of quality pricing.

This graph provides that most customers know McDonalds slogan, ''I'm lovin' it''

It also shows McDonalds is famous with slogan as well.





Marketing research

This section shows how marketing research will support the development, implementation and evaluation of marketing strategies and programmes.

Using research, we will identify specific features and benefits our target market segments value. Feedback from market tests, surveys and focus groups will help to develop products. I also measuring and analysing customers attitude toward competing brands and products. Marketing continuously monitors customers' preferences for that McDonald's has introduced new products and phased out old ones .

McDonalds mission: -McDonald's aim to be the UK's best fast service restaurant experience.

McDonald's has placed considerable emphasis on enhancing its brand positioning through sponsorship of events and sports.

  • It was one of eight corporate sponsors of the Millennium Dome Experience, investing �8 million in the Dome's community programme and learning experience.

  • It has been a major sponsor of international football, including the World Cup since 1994 and the Champions League from 1996 to 2000.

  • It has sponsored British athletics since 1993, notably the McDonald's Young Athletes' League, training 11 to 17 year olds.

  • It has sponsored Child Safety Week since 1994

Customer perception and customer expectation

Product success depends on customer satisfaction . it's a key factor because many products have failed to lack of their inability to build a healthy perception about themselves in the customer minds. McDonalds is going to be an internationally renowned brand because it have certain expectation for the customers

Target Segment               McDonalds facility to customers


A family with children       A fun place for the children


Urban customer               Great taste, quick service


Teenager                         Hangout with friends, but keep it affordable

Customers expect it to be an hygienic, and little sophisticated brand that respects their values. Customers expect the brand to enhance their self image. For customer expectation McDonalds provide varieties of food and maintain hygienic, cleanliness.


Donalds have various recognisable advertisements to encourage customers to try out the food. Recently for showing people about their cleaning and cooking process , they have launched an advertisement. They refer has a celebrity boxer exploring to show that they keep the kitchen area very clean. This is good publicity for the customers of McDonalds who may have doubts on how the food of McDonalds is made. The advertisement clearly sends a message across to the viewers that McDonalds is hygiene conscious. This advertisement will help to attract more customers to try out McDonalds have a positive effect on the performance.

McDonald's maintained an extensive advertising campaign. An usual media (television, radio, and newspaper), the company makes significant use of billboards and signage, sponsors sporting events ranging from local game , national game and international game and also arrange the Olympic Games.So television has always played a central role in the company's advertising strategy. My product can be offer special offer Vegetable chicken meal track . It is include burger, fires and drink �5 and another offer may be applicable voucher, buy one another half price, Gift offer( ipod, mobile phone, I-phone, latest movies DVD etc).

McDonald's campaign i'm lovin' , international brand, was created by Heye & Partner, a longtime McDonald's agency. McDonalds first global advertising was launched in Munich, Germany on September 2, 2003, UK on September 25, 2003 and in the USA on September 29, 2003.McDonald's introduced new packaging, eliminating the previous design stated above with new, inspirational messages, the "I'm lovin it" slogan. (appearing only once on most packages). McDonald's also updated their menu boards with darker, yet warmer colors, more realistic photos of the products featured on plates and the drinks in glasses. In 2009.

McDonald's campaign and marketing cost $25 billion in year . McDonald's outdoor advertising the right tactic in tourist location or place that attract large volumes of people know McDonald's restaurant is located and can be useful to communicate a change with in the restaurant, such as a re-image or extended hours. Type of outdoor advertising can be used to good effect:-

POD:- Specific Place

Advertising can be booking short-term or long -term . long-term are for more permanent sites minimum 12 months and long-term automatically be re-booked by marketing team . Short-term bookings are bursts 1- 2 months to raise awareness of new news such as new restaurant opening times (eg 24 hrs). McDonald's restaurant have a proximity poster site that is with in a 500m radius and proximity poster impact big effect of the advertise. So for advertising my product 'vegetable chicken burger' I can advertise by poster, television, News paper ,Online internet advertising , sports sponsor, community and social organisational charity fair organise, cultural party organise so various way of advertising for attracting the customers.

Product Strategy

Product strategy includes decision of product mix line, brand, packaging, labelling warranties

Product mix

Techniques

Custom-Tailored method instruments and formulas

Marketing Research

Financial Factor

Implementation, control and feedback

Source: ChinaStones - http://china-stones.info/free-essays/business/mcdonald.php



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