Case Analysis on Mc Donalds, Essays (university) of Marketing

Download Case Analysis on Mc Donalds and more Essays (university) Marketing in PDF only on Docsity! How are customer tastes changing in the fast-food industry? What impact do these changes have on McDonald’s There are several trends in the fast-food infustry that defines the changes of customer tastes. One growing trend is the move by customers to non- hamburger sandwiches where the gradual shift of customer preference towards hamburger substitutes had created strong competitors for McDonald’s. Three of the major competitorsoffering non-hamburger fast-food include Pizza Hut, Kentucky Fried Chicken and Taco Bell. Moreover, a major change in the industry is the increase in the fast- casual segments that include restaurants like Boston Market, Panera Bread Company and Atlanta Bread Company. These change was induced as people are willing to pay a couple of dollars more for better dining experience yet don’t want to sacrifice the convenience for a quick service. Another cause of this change is that Americans are eating out less often compared to the previous years and eating habits are changing where younger consumers are getting tired of fastfood and are thinking about their health. These changes brought impact to McDonald’s on several aspects. Years of profit drains and flat sales are driving fast-food chains including McDonald’s to find new marketing strategies to compete in a mature market How well are these changes in customer tastes and preferences being reflected in competitive strategies in the industry? Changes in customer tastes and preferences pushed McDonald’s to continuously adapt to the customer wants and needs creating various marketing strategies and tactics. Jack Greenberg recognized the difficult task the company faced in trying to grow sales, market share, and profits in a fiercely competitive industry. He not only recognized the strengths of the competitors in the burger segment but also knew that ither providers of fastfood and other meals were quick to take advantage of changes in customer preferences and taste. McDonald’s and other competitors in the hamburger segment continue discounting and offering variety of nee products to attract customers. In the case of McDonald’s, their approach was advertising message focused on tasty and nutritious foods, friendly folks and fun. They invested heavily in advertising its product and improving its image. They also welcomed something refreshing for the consumers which took place on the establishment of McCafe. Moving on to McDonald’s competitors on both burger and non-burger segment, Burger King offered a new salad line and a permanent array of valued-price offerings. Hardee’s declined at 15 percent and attempted to reverse sliding sales by introducking new items on the menu and joining the price-promotion burger wars. Pizza Hut on the other hand, called its effort a “well executed, differentiated, yet value-oriented product that would drive traffic and sales over the next several periods. KFC offered “Kids Lap Top Pack” as a strategy and lastly, TacoBell remained with a principle of brand establishment and retained to their tactic of providing high-priced offerings proving that the brand could leverage its strenghts to bring up the average meal price. What are McDonald’s strengths and weaknesses and what conclusions do you draw about its future? McDonald’s is a global and successful, and loved brand even in the Philippines. Its strenght is what it keeps the company growing and existing up to day and Its weaknesses is what keeps it improving. Upon analysis the stregths of the brand includes world-wide brand equity, 42% of US fast-food hamburger business, Consistency of food, Successful products: Fries, Happy Meal, Big Mac, Egg McMuffin, Promotion and Overseas market. Weaknesses includes Declining market share, Weak product development, Disgruntled franchises, Quality and taste of products, Slowed revenue and income growth. One conclusion is that McDonald’s always have to be adapting, and aim to be the leading brand when it comes to fast-food by analyzing what the company does best and what it can do more in order to maintain stability. Should McDonald’s develop a seperate strategy for heavy user segment of the fast-food industry? Heavy users are identified to be important in the business. Heavy users have been described as single males, under 30 years of age. It is estimated that heavy users comprise 20 percent of customers but account for 60 percent of all visits and therefore, should be regarded with considerstion and taken care of. They are gold. They may be a minority — even a small minority. Spend time analyzing your heavy users. Find out what they want and why your product keeps them coming back. Look for qualities that would make them even more loyal. Chances are, small improvements aimed at heavy users will lead other customers, such as your early adopters or repeaters, to become heavy users themselves. At some point in time a reward may increase their loyalty and satisfaction. Say for example adopting Starbuck’s concept of reward card ocassionally. Their strategy to increase sales is the card itself where you have to complete the required stickers on every purchase and you’ll get an aesthetic planner in return. Imagine if this would be applicable to McDonald’s. What reward can they offer? Quite interesting to think of, right? What should Jack Greenberg do to grow sales, profit, and market share at McDonald’s? One way to increase market opportunities is a direct competition analysis. Knowing the existing players in the market where you are competing or going to compete is important when evaluating opportunities. Relevant questions in this case are: What are the products and brands of our industry that are growing more significantly and why? What is their value proposition? What competitive advantage do we have over them? Key elements to continuously increase sales, profit and market shares are: Stay relevant through innovation, Respond to customers – fast, use customer ideas, snap up competitors (Sometimes the easiest way to get more customers is to simply buy them.