lOMoARcPSD|3470863
lOMoARcPSD|3470863
MARKETING
MANAGEMENT II
{ CASE STUDY }
SUMBISSION DATE: 27/05/19
SUBMITTED TO:
SUBMITTED BY:
Dr. Dhanya J.S.
Assistant Professor
HARISHKUMAR G
SRUTHY S
CETSOM
BATCH : A
T3 MBA
CETSOM
Prepare for your exams
Study with the several resources on Docsity
Earn points to download
Earn points by helping other students or get them with a premium plan
Guidelines and tips
Prepare for your exams
Study with the several resources on Docsity
Earn points to download
Earn points by helping other students or get them with a premium plan
Community
Ask the community
Ask the community for help and clear up your study doubts
University Rankings
Discover the best universities in your country according to Docsity users
Free resources
Our save-the-student-ebooks!
Download our free guides on studying techniques, anxiety management strategies, and thesis advice from Docsity tutors
case analysis on financila management
Typology: Essays (university)
2018/2019
1 / 19
This page cannot be seen from the preview
Don't miss anything!
Related documents
Partial preview of the text
Download mc donalda case analysis and more Essays (university) Finance in PDF only on Docsity!
lOMoAR cPSD| 3470863
MARKETING
MANAGEMENT II
{ CASE STUDY }
SUMBISSION DATE: 27/05/
SUBMITTED TO: SUBMITTED BY:
Dr. Dhanya J.S. Assistant Professor
HARISHKUMAR G
SRUTHY S
CETSOM BATCH : A
T3 MBA
CETSOM
McDonald’s Case Study
traditional fast food, served in nicer restaurants with more comfortable surroundings, but faster than in traditional restaurants.^4 Another trend is to recognize heavy users which are said to be single males under 20 years of age, who have working class jobs, love loud music, don’t read much and hang out with friends. 5 This group makes up 60% of the company’s heavy users, so McDonald’s would have to cater to that market and find a product that appeal to those users. McDonald’s has come up with advertising campaigns to help combat the dropping sales such as its New Taste Menu, and this was geared toward the healthier consumer. The message was that the company was tasty and nutritious, friendly folks and fun could be found at McDonald’s^6 The company has tried other areas of expansion in the coffee market with its McCafe coffee shop. This concept was a 32-seat 900-square-foot building that shares access with a McDonalds. McCafe offers all regular coffee drinks and speciality pastry items and has grown to 300 united in 17 countries. Although the efforts to focus on certain user groups has helped, the company has been blasted by the first lady as being one of the most unhealthy choices, and the super-size me movement didn’t help either. We are a country that over indulges taking in portions that are 4 times the daily amount required for a healthy lifestyle, and although adding more was good for the company’s bottom line it has not been healthy for America’s waistline. In 2005, the company .
announced that it was to start printing nutritional information on its packaging, including fat, salt, calorie and carbohydrate content, thus putting the information directly in the consumer’s hands and allowing them to make an informed decision about their meal choices^7 McDonald’s has been forced to contend with a number of potential obstacles to growth in recent years, most notably stark criticism and a less-than-favorable global economic climate that has seen consumers reduce their discretionary spending. McDonald’s has, however, employed strategies to counter these problems, and the decisions the company has taken have allowed it to maintain a strong level of growth. The move towards a healthier menu, achieved by making changes to existing items and introducing new offerings, has helped satisfy some of its critics and attract those who are perhaps more health-conscious than the ‘traditional’ McDonald’s customer, while new items such as the McCafe range are helping the company attract new customers. The message has been reinforced by a relentless and innovative marketing campaign, which has helped make the McDonald’s brand one of the most recognized and valuable in the world. SWOT ANALYSIS
Strengths:
McDonalds has worked very hard to build a huge brand with 31,000 restaurants in 120 countries. There golden arches and Ronald McDonald are one of the most recognized symbols. McDonald’s market share is still increasing while most are losing market shares. Training managers is a serious business. They even have their own program to train managers to be the most professionally. They have global operations all over the world. A big part of the restaurants are franchised out. They have established excellent locations in places like theme parts, airports, Wal-Mart’s, and along well traveled roads. McDonalds is efficient in operating guidelines in the
target for Americans being obese because of things like Supersized Meals, no fruit or yogurt, very slim salad selection. Their marketing strategies have to reach a wide variety of people. Like small children all the way to adults. Criticism comes with how they try to market.
Promotion and Communication Analysis
McDonalds uses several outlets to promote their company. One of the most successful methods of promotion by McDonalds was by coming up with their latest jingle, “I’m loving it”. McDonalds, fortunately, is not one of those companies who have a hard time with brand recognition. The familiarity of using the same color pallet, the same sounding names for their products such as “McCafe” or “McDouble” are just a few examples of ways that McDonalds has succeeded in the Fast Food industry by mastering brand recognition. Recently, McDonalds has tried to attract a different type of consumer by offering healthier menu options. Many of McDonalds recent advertising campaigns has been centralized around tasty and nutritious food options, hoping to change their image from “greasy” to “fresh” by offering grilled chicken options and more salad choices. Giving back to the local community through charity organizations like the Charity Christmas Parade in Chicago and the Ronald McDonald house of charity is a few ways the company tries to promote a positive corporate image. This type of community outreach allows the public to view the company as more than just a fast food restaurant. Overall, McDonalds does a lot of publicity to strengthen their company name, give back to communities, and provide their customers with their everyday demands.
Pricing
McDonalds is well known for their dollar menu items and for offering its consumers with low cost meal options. McDonalds is priced well below competitors meals with an average meal ranging anywhere from $3 to $7 depending on what you order. As an organization, McDonalds succeeds by keeping their prices low and affordable, making it an attractive choice for students, travelers, or those consumers on a budget. McDonalds has recently stepped up their menu options, by offering more “high-end” choices to attract customers who are willing to pay more for higher quality sandwiches. One high-end choice is to completely customize your sandwich by choosing exactly what you would like on your hamburger, making your experience feel more personable. McDonalds charges a higher rate for the customizable option, while still making dollar menu options available. This type of price diversity is unusual for most fast food restaurants, but it allows the company to be flexible and attract a larger market.
Competitors Analysis
History McDonald’s has faced stiff competition all along, from Burger King, Wendy’s, Taco Bell, and other numerous fast-food chains. In years none of those competitors ever came close to McDonald’s. McDonald’s recognizes that it is not only up against larger burger and chicken chains but also independently owned fish and chip shops. First of all McDonald is the world’s largest chain of fast food restaurants, the corporations serves around 68 million customers daily. It is why its competitors are getting worried and are trying to find ways to compete with McDonald’s. That is why there is no doubt that the company is one of the
traditional fast-food items, such as hamburgers and fries. A burger for a burger substitute is the direct nature of this competition as each competitor’s main product is the hamburger. Unlike McDonald’s which only relies on its dollar menu value meal, Wendy’s has no such restrictions and is free to exploit the continued growth of the fast casual niche the remains the driving force behind restaurant expansion. Also, Wendy’s other advantage is the menu innovation, restaurant restorations and mobile marketing all figure into the Wendy’s recipe in winning more cliental. Non-Burger Segment Competition Let’s not forget also that non-burger competition has also increased. Actually, in this category we can count Pizza Hut, KFC, Subway and other vendors. Further we believe that Chipotle’s success is selling burritos may have reinvigorated the broader market for Mexican food. On the higher-end, McDonald’s has to compete with customers who are looking to healthier options like Subway. Therefore, the brand fights back by offering more healthy menus and underline the quality of their ingredients through advertising campaigns. Pizza Hut has the first mover advantage in the pizza chains, the delivery service of Pizza Hut is clearly a competitive advantage that it enjoys. Its delivery service is one of the quickest and who doesn’t want to have fast service. Pizza Hut is also known for its innovation of pizza coming up with new flavors and new types of pizza hut. The people want to try new things and Pizza Hut isn’t afraid to experiment. KFC its primary source of income is selling chicken. Its competitive advantage is a very strong financial background. KFC has been functioning as a multinational corporation for several decades. As a result, the company is familiar with the logistical and quality problems which accompany operating an international food operation, and has demonstrated that it can work with host countries and businesses. Within the food chain KFC also developed a new
advantage which is eco-friendly green KFC. The restaurant is design in cutting energy and water consumption by 30 percent and reducing CO2. Other operations of KFC help it reduce waste and recycle. Subway is a sandwich and salad restaurant that tries to target people that are trying to be much healthier. We can also say that one of the most competitive advantage of Subway is its healthy menu. The salads and sandwiches appeal much more to the people as compared to fried chicken, burgers, fries, and pizzas. With its advertising and promotion, Subway has long been highlighting its healthy food and has established itself as a healthy brand. Another advantage for subway that its location can be found in food courts, health clubs, hospitals, universities, amusements parks and just about anywhere. Location is a very big factor when trying to sell it products depending on what the market is doing. Also Subway unlike McDonald’s allows its franchisees to choose its own food suppliers, to ensure they can access the freshest ingredients. Completion Summary While other competitors come nowhere near McDonald in growth, sales or profit, many new entrants and established restaurants are growing in a rapid pace. It won’t be too long when we start seeing a bigger corporation then McDonalds. McDonald’s competition comes not only from fast food restaurants, but also from healthier restaurant like subway which is growing at a rapid pace and marketing its product to people that want to become healthier. In a world were change is good McDonald’s is going to have to learn how to innovate once again and come up with new products to offer customer in order to stick to being the biggest competitor in the fast food industry.
SUMMARY : Mc Donald’s Strategy Being a worldwide brand is no easy task and one that McDonald’s should be recognized for, however, as they say “The times, they are a changing”, today’s consumer is looking for a more healthy option and preferably one with everything organic, free-range and hormone free. With the recent scare of e-coli, Chipotle restaurants who offers completely organic and free- range chickens that are grown by the restaurant on a free-range farm, this proves that more control over those organic products needs to be addressed for quality and safety control. McDonald’s needs to do primary and secondary data research to see if this healthy option can be introduced with McDonald’s name attached to it because the majority of the public associates them with the unhealthy option, so would just revamping their menu do the trick. This option may not be able to be associated with the brand; much more marketing research would need to be implemented. With the biggest competitors being Burger King, Hardee’s, and Wendy’s McDonald’s has its work cut out for the hamburger giant, and blazing a trail the way to this new image would change fast-food for the better and hopefully make the products a more healthy option.
SOLO TAXONOMY:
LEVEL 1: SWOT Analysis, Pricing, Product
LEVEL 2: Analyses of competitors, Target customers,
Segmentations
LEVEL 3: Marketing Mix, Promotional strategies, Targeting
and segmentation,
LEVEL 4: Promotional Mix, Strategies, Marketing
Communication
weaknesses are that they are a high caloric intake provider and almost everything on their menu is above 700 calories and packed full of GMO’s and other unrecognizable products that probably don’t nourish our bodies the way they should and thus linking obesity to these kinds of foods. It is imperative that McDonald’s generate new products that are healthy and organic. McDonald’s future is fine. It strengths outweigh its weaknesses. The company is still one of the most well-known companies. The only challenge it faces is also associated with “cheap and greasy.” In the future they will have to come up with a way to eliminate its grease, innovate the menu, and market more healthy products. Strengths ➢ Intangible assets – Positive company social-image (Ronald McDonald House), Name recognition, and brand-loyalty ➢ Market leader in mature market: possesses three times thee sales volume of nearest competitor and 7% of market sales. ➢ Increases in assets, shareholder equity and numbers of restaurants with decrease in number of shares outstanding ➢ Accessible locations ➢ Strategic marketing alliances – movie tie-ins, McDonald’s brand toys ➢ Scalable product marketing and pricing – Uses Company owned locations to test market product and price
➢ Weaknesses ➢ Market share grew more slowly than that of competitors ➢ Debt increases in 2000 & 2001 not producing asset gains shown in previous three-years ➢ Operating income, EBT, free cash flow declines ➢ Dissatisfaction with food quality ➢ Susceptible to negative publicity
4. Should McDonalds develop a separate strategy for the heavy user
segment of the fast food industry? Yes. McDonalds needs to come up with a strategy to keep the heavy users, or in McDonald’s case, single males over the age of 30, interested in continuing to eat at McDonalds Food chains. Targeting the demographic that is considered “heavy users” is the first step in figuring out a strategy that keeps the customer happy and choosing to come back to McDonalds. Targeting demographics by advertising directly to the heavy user consumer or by analyzing which food product seems to be the returning customer’s favorite is a few ways to ensure to continue to attract the heavy user. Discounting meals and keeping the same great quality or familiar products is the best strategy a company can have for heavy users.