Product & Market Strategy - Essay Example

Officially McDonalds names three elements in their strategy to be the world’s best quick service restaurant: People (being the best employer), Customers (providing them excellence) and System Growth (for owners/operators, suppliers and company). ‘McDonalds has always been a franchising Company and has relied on its franchisees to play a major role in its success. McDonalds remains committed to franchising as a predominant way of doing business. Approximately 70% of McDonalds worldwide restaurant businesses are owned and operated by independent businessmen and women, our franchisees’.

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Usually, McDonalds offers franchises to poor performing restaurants in order to sustain profitability. Advertising is used to differentiate McDonalds’ products from competitors and as a means of branding: Advertising Spend in 2001 amounted to  39m (KFC:  14m, Burger King: i 8. 6m, Pizza Hut:  7. 4m). Furthermore, McDonalds is involved in various high profile sponsorship schemes (e. g. major Sponsor of FIFA World Cup, ‘gold’ sponsor and official restaurant of the Olympic Games) that secures them favourable PR.

Recently McDonalds acquired Boston Market Chicken restaurants, the Donatos pizza chain and Chipotle Mexican Grill. In the UK, it purchased the Aroma coffee chain and 33% of Pret A Manger. This demonstrates that McDonalds has diversified into other segments of the fast food/ convenience /take away market. McDonalds is the world’s largest food service organisation. It has the greatest market share of the breakfast, lunch and dinner market and holds 67% of the UK Burger Market. McDonalds’ golden arches are the world’s biggest brand with higher awareness than Coca-Cola.

McDonalds is constantly introducing new products, usually for a limited period of time. This is because management recognise that consumers like variety as well as a continuation of good products such as Big Macs and Cheeseburgers. Also, they are well aware that if McDonalds has too many products running at the same time then the speed of customer service will deteriorate. However, McDonalds has not introduced healthier products in response to growing concerns about obesity.

It is difficult to evaluate the extent to which McDonalds fulfils customers’ demands. In the 2001 consumer survey conducted by Sandelman & Associates, McDonald’s was ranked as last out of 60 chains for taste. Statistics that describe McDonalds cleanliness are not available and therefore the achievement of this objective is difficult to examine, but anecdotal evidence suggests that suitable policies are in place to meet that objective. Customer service quality is difficult to assess but it is renowned for being quick.