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FAST FOOD RESTAURANT

CASE 06 MARKETING MANAGEMENT GROUP 06

CONTENT
INTRODUCTION

SUBWAY : SUCCESS FACTOR OF SUBWAY


MCDONALDS HISTORY COMPETITOR 7P OF MCDONALDS NOWADAYS ISSUE RE-BRANDING : THE MCDONALDS

STRATEGY

INTRODUCTION
Fast food is the term given to food that can be prepared and served very quickly. Fast food outlets are take-away or take-out providers, often with a "drive-through" service which allows customers to order and pick up food from their cars; but most also have a seating area in which customers can eat the food on the premises.

VARIANT OF FAST FOOD


Fast food often brings to mind traditional American fast food such as hamburgers and fries. The other variant of fast food : Japan : Sushi, Bento United States : Pizza Middle East Asia : Kebab United Kingdom : Fish and Chips

WHY FAST FOOD RESTAURANT GROWS FASTLY?


With todays hectic lifestyles, time-saving

products are increasingly in demand. One of the most obvious examples is fast food. The fast food industry focuses heavily on rapid consumer turnover, speed of service, take-out sales, and less expensive price compare to table service restaurant meals.

SUBWAY
Subway is a fast food franchise that primarily

sells submarine sandwiches, salads and personal pizzas. It is owned and operated by Doctor's Associates, Inc. (DAI). Subway is one of the fastest growing franchises in the world with approximately 31,835 restaurants in 91 countries as of September 2009.It is the largest single-brand restaurant chain globally and is the second largest restaurant operator globally after Yum! Brands (35,000 locations).

SUCCESS FACTOR OF SUBWAY


Menu reflects demand for fresh, healthy and fast.

Partnering with the American Heart Association.


Worldwide brand recognition. Customizable menu offerings. Low franchisee start up costs Size and number stores and channels

McDonalds
McDonalds Corporation, known as McD, started

it business from 1940. McD primarily sells hamburgers, cheese burgers, chicken products, and french fries. More recently, it has begun to offer salads, wraps, and fruit. McD is the world's largest chain of fast-food restaurants with more than 31,000 local restaurants serving more than 58 million people in 118 countries each day. Low price, speed, service and cleanliness became the critical success factor of the bussiness.

McDonalds
McD is looking for homogeneous consumer groups and replicating the same format in foreign countries, making only minor changes to suit the local or national preferences but recognizably maintaining the original concept.

India

Thailand

Dubai

Indonesia

McDonalds
Despite the diverse environments, most outlets were operated using the same reward systems, the same hierarchical management structure, and the same routine for serving food. McD centralized the design of its service concept, restaurant layout, the selection of franchisees and other personnel, and the design and content of training of restaurant managers and staff. Such strategy, structure, and uniformity have made McDonalds the brand name that defined American fast food.

COMPETITOR
Yum!
the world's largest fast food

restaurant company in terms of system units Fortune 500 coorparations, that operates or licenses Taco Bell, KFC, Pizza Hut, and A&W restuarant
Subway
The third largest fast food operator

globally after Yum! Brands and McDonalds

How McD become a global brand


By franchising, McD are able to expand rapidly

across countries. Establish Hamburger University that only aim to train franchisees and corporate decision-makers.

McD MISSION

McD mission is to be the worlds best quick service restaurant experience. Being the best means providing outstanding quality, service, cleanliness, and value, so that we make every customer in every restaurants smile.

7P OF McD
McDonalds overall strategic plan is

called Plan to Win: created better McDonalds experiences through the execution of multiple initiatives surrounding the five factors of exceptional customer experiences product, price, place, promotion, people, physical evidence, process.

PRODUCT
Hamburgers

Various types of chicken sandwiches


French fries Soft drinks Breakfast items Dessert Salads Vegetarian items Wraps

PRICE
McDonalds has a unique pricing strategy that

falls solely on their many product lines. The most notable and recent example of this is McDonalds Dollar Menu.

PLACE
Number of locations more than 31,000 worldwide. Type of restaurant : counter service drive-through service gas stations convenience stores shopping mall McStop

PROMOTION
Happy meals

McDonalds used to give children a choice between toys, milk, fruit, or vegetables as part of their Happy Meals. Slogan Im Lovin it

PEOPLE
Stars as their performance

Gives employee larger role in decision


Philosophy of quality, service, cleanliness, and

value is the guiding force behind its service Fast friendly service

PHYSICAL EVIDENCE
Cleaness

Speed
Quality Transparency

PROCESS
Food manufacturing transparent to the customers Training to the licenses Invented the most efficient cooking equipment New method of food packaging and distribution

FALLEN OF McD
In 2002, McDonalds posted its first loss. Earnings

were $893.5 million, down 45 per cent from $1.64 billion in 2001. McDonald's share of fast-food sales in the U.S. has slipped almost two percentage points, to 16.2%. The drop has come even as the company has increased its number of restaurants by 50%, and the Total revenue from 2001 to 2002 just increased for 3.6%.

Table : McDonalds Revenue (dollars in millions)


2000 Total Revenue Operating Income Net Income 14,243 3,330 1,977 2001 14,870 2,697 1,637 2002 15,406 2,113 893

Source: McDonalds financial report 2004 Net Income (2001-2002)= (893-1,637)/1,637= 45.5% Total Revenue (2001 -2002) = (15,406-14,870)/14,870 = 3.6%

What went wrong?


The most fundamental problem the is the quality of its food. While the company focused on building more stores, consumers have decided they want better food and more variety.

HEALTH ISSUE
Obesity
According to the Massachusetts Medical Society Committee on

Nutrition, fast food is especially high in fat content, and studies have found associations between fast food intake and increased body mass index (BMI) and weight gain.

Food poisoning
Manure gets mixed with meat, contaminating it with salmonella

and Escherichia coli 0157:H7. E. coli 0157:H7 is one of the worst forms of food poisoning. Usually spread through undercooked hamburgers .

ENVIRONMENTAL ISSUE
The biggest environmental nightmare for McDonalds : Waste Packaging Global warming

Obesity and Well being issue


There is increasing concern about obesity rates and

related risks to well-being, and a holistic approach by McDonald

High-Quality Choices - Continue to develop high

quality menu offerings that provide customers with a range of choices that meet their needs and preferences and that fit in a balanced diet. Consumer-Friendly Nutrition Information Enable consumers to make the right decisions continuing to provide even easier access to nutrition information Communicate Responsibly - Continue to refine marketing and communication practices, particularly to children

High-Quality Choices Examples of nutrition information on the packaging.

Communicat e Responsibly particularly to the children

NUTRITION INFO

Enviromental issue
McD efforts on minimizing environmental impact of

restaurants business

Energy efficiency Find

further ways to increase energy efficiency in restaurants to save money and reduce our environmental impact.
In 2007 and 2008, McDonalds was ranked second among

food service companies by Climate Counts, designating the company in the organizations Starting category, as a better choice for the climate conscious consumer. McDonalds restaurant managers are equipped with a variety of energy management tools, including restaurant energy surveys and audits, and in selected restaurants, Energy Management Systems (EMS). In 2007, McDonalds USA was named an Energy Star Partner of the Year by the U.S. Environmental Protection Agency.

Sustainable Packaging & Waste Management

Continue exploring ways to reduce environmental impacts of consumer packaging and waste in restaurant operations.

Green Restaurant Design Enhance our current

strict building standards to incorporate further opportunities for efficiency and innovation in the design and construction of our restaurants.

McDonalds France Beaugrenelle restaurant in Paris with an array of sustainability enhancements and environmentallythemed decor.

Re-branding: the McDonalds strategy

McDonalds Value
We place the customer experience at the core of

all we do We are committed to our people We believe in the McDonalds System We operate our business ethically We give back to our communities We grow our business profitably We strive continually to improve

We place the customer experience at the core of all we do


Allowing franchisees to launch extensive

experiments in food and dcor, launching Im lovin it marketing theme Providing the customers with high quality food and superior service, in a clean, welcoming environment, at a great value.

We are committed to our people


Talented people, with diverse backgrounds and

experiences, working together in an environment that fosters respect and drives high levels of engagement, is essential to continued success. McD Employee Benefits are organized into 4 categories:
Health and Protection Pay and Rewards Investing Employee future Helping Balancing Employee work and life

People Priority: McDonalds Approach is to address all employees' interests

Respect - Create a diverse and inclusive culture where everyone feels valued and respected. Commitment Enhancement - Continue to enhance our employment value proposition to drive high levels of employee commitment. Talent Management - Attract, develop and retain the most talented people at all levels.

We believe in the McDonalds System


The balance of interests among the three groups

: owner/operators, suppliers, and company employees.

We operate our business ethically


McDonalds conducts its business to high

standards of fairness, honesty, and integrity. And the people are individually accountable and collectively responsible.

We give back to our communities


Support Ronald McDonald House Charities Support World Childrens Day Ronald McDonald Reading Corner , to utilize Ronal McDonald to promote early literacy. Increase financial and volunteer support to RMHC Partnerships and sponsorships Owner/Operator Involvement Disaster Relief

McDonalds Champion Kids programs

McDonalds serves as the Official Restaurant of the Olympic Games

More than 930 restaurants, McDonalds China will support the kind blood donors with a free orange juice and hamburger to replenish their nutrients, upon their presentation of a blood donation certificate (Sichuan region earthquake relief efforts)

We grow our business profitably


Provide sustained profitable growth for our

shareholders. Requires a continuing focus on customers and the health of the company.

We strive continually to improve


Anticipate and respond to changing customer,

employee and system needs through constant evolution and innovation.

CONCLUSION
Nowadays fast food are recognized as an

unhealthy food However: their income keep on growing, because: they offer: speed, cleanliness, and delicious food. McDonalds do their repositioning from unhealthy to healthy fast food.

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