Marketing

Marketing Strategy
Mc Donalds & Burger King Analysis

Overview of the Fast Food Industry:

Even though it is a mature industry, the fast food market is seeing a fair amount of upheaval. Competition is tough and survival is difficult. It is no longer enough to just fill someones stomach you have to do it better and faster than others do. Product innovation, customer satisfaction, and differentiated promotions are of utmost importance now more than ever. Fast food industry doesnt have very high barriers for entry which led to the intense competition amongst the brand available in fast food space. There used is lot of promotional schemes as the brand switching is very frequent in India right now. Fast food doesnt have any substitute as it is the convenience which matters most. Buyer power is weakened by the fact that, while not everyone enjoys fast food. Brand Loyalty also causes the buyer weakness. The fast food business is labor intensive, and minimum wage legislation in India strengthens employees, overall, supplier power is assessed as strong. Entry to the India fast food market does not require large capital outlay; setting up a single, independent fast food outlet is not a big problem. Emerging middle class and burgeoning income levels in India owing to the outsourcing and globalization has caused a lot of change in the traditional conservative nature of Indians. India has been a nation of varied language, religion, culture, season and hence different eating habits and custom. In present scenario, its really exciting to study the consumer behavior of the Indian consumer with respect to restaurants which has an expected growth of 20% till 2011. An emerging industry with global players lining up to grab up the pie makes the chemistry of entire fast food industry quite interesting. Consumer behavior has always impacted the business and industry of any Fast food industry in India has evolved with time and as per consumer preferences. It is an industry where the consumer perception matters most as India has its own traditional food habits. In services like fast food restaurant, its always experience qualities that matters. Any consumer takes decision based upon his/her experience the restaurant. Thus in restaurants its always the hospitality and quality which matters most. Consumer Behavior Convenience and time are priorities.People do not have time to manage for food at home, and they wish for a more convenient way of managing this. The dependence behavior on items offered by the players in this industry has increased tremendously in past few years. Obesity is one of the major problems faced in the country. Fast food is the biggest responsible factor behind it, but still, people are queuing outside restaurants that are encouraging them to continue indulging in the, very often less than appropriately healthy eating options. What is true, however, is the fact that the

fast food players are showing a far greater health orientation in their offerings than ever before.

Product: Food offerings getting healthier due to consumers increasing awareness Bigger is Better: The size of items on the menu is becoming bigger every day, Combo meals are being super sized. Carls Jr. is an example of a player who has specialized in mountainous burgers - Portobello Mushroom Burger being one of them. Diversity of Menu Options: Players like McDonalds, Burger King, and Wendys have also explored the $77 billion breakfast market. Attracted by this new market, Taco Bell launched the Fourth Meal, which is supposed to be had early in the morning, probably after getting back from late night parties. Health is Wealth: Due to the anti-obesity drive, healthy/low-fat food is the category that is picking up pace. Burger King has launched "Apple Fries" for kids, which is basically apple slices made to look like French Fries.

THE 7 P's Of Mc DONALDS' PRODUCT: Mc Donalds product portfolio primarily comprises of vegetarian and nonvegetarian burgers. The vegetarian burgers like Veg surprise, salad sandwich, Mc Aloo Tikki Burger, Mc veggie burger are offered to the customers. Nonvegetatarian burgers include Chicken Mc grill, Mc chicken burger, Fliet of fish and chicken maharaja burger. Along with these french-fries, veg pizza mc puff, wrap chicken Mexican, wrap paneer salsa, potato wedges, soft serve pineapple and choclate ice creams, Mc swirl soft drinks, coffee and Mc shakes are also offered to increase the variety in the product portfolio. Mc Donalds also provides mean combos with medium fries and medium soft drink, happy mean with small soft

drink, econo meals with small soft drink and value meals with potato wedges and small soft drink.

PRICE: Mc Donalds vegetarian burgers are priced between Rs 20 and Rs 48. Wrap paneer salsa is priced at Rs 45-50. The non vegetarian burgers are priced between Rs 30 and Rs 60. Wrap chicken Mexican is priced at Rs 55. Medium French fries are priced at Rs 28, potato wedges at Rs 20, soft serves at Rs 35, mc swirl at Rs 12, medium soft drinks at Rs 20 and medium shakes at Rs 45.

PROMOTION: At Mc Donalds the prime focus is on targeting children. In happy meals too which are targeted at children small toys are given along with the meal. Apart from this, various schemes for winning prices by way of lucky draws and also scratch cards are given when an order is placed on the various mean combos. In fact, the various econo meals and value meals also signal to the customer that buying separate items results in greater value for money for the customer.

PLACE: Mc Donals outlets are very evenly spread throughout the NCR region. Mc Donalds does not offer home delivery but its outlets are very readily accessible. Mc Donalds also offers take away drive through facilities.

PEOPLE: The employees in Mc Donalds have a standard uniform and Mc Donalds specially focuses on friendly and prompt service to its customers from their employees.

PROCESS: The food manufacturing process at Mc Donalds is completely transparent i.e. the whole process is visible to the customers. In fact, the fast food joint allows its customers to view and judge the hygienic standards at Mc Donalds by allowing them to enter the area where the process takes place. The customers are invited to check the ingredients used in food.

PHYSICAL EVIDENCE:

Mc Donalds focuses on clean and hygienic interiors of is outlets and at the same time the interiors are attractive and the fast food joint maintains a proper decorum at its joints.

The Competition and the Strategies McDonalds traditional targets have always been moms and kids, in fact families. However, there is of late heated debate about advertising that targets children because of a) a general overall feeling that advertising has too much of an influence on children, and b) because of fears of rising Child Obesity. In US inspite of drive against child obesity running in the country, McDonalds advertised in the report card of school kids. It said those who secure good grade in exams would get free Happy Meal. However, the agitation by parents forced McDonalds to withdraw the initiative. Burger King on the other hand has a very different way of advertising. It believes in competitive advertising, especially against McDonalds in its commercials. Recently in US it launched the Whopper Freak-Out campaign. With the help of hidden cameras at outlets, it recorded the reaction of customers in Burger King Outlets when salespeople said that the Whopper was discontinued. Not surprisingly, there were extreme reactions of disappointment from all customers. This campaign was a hot topic of discussion in the blogosphere also and many bloggers were skeptical about the reaction of customers recorded by BK. They felt that the King had paid the people to react favorably towards the brand. Strategic plan: Not Wise to Stick to US Because of cut throat competition, increasing prices of raw material, regulatory issues, agitation by social organizations, slow down of the U.S. economy and increasing fuel prices, many fast food chains have diverted their attention from the U.S. to the eastern part of world especially China. McDonalds is planning to open 120 restaurants in China in 2008

Customer Segmentation:

Challenges Faced by Fast Food Industry:

The components of the report

Over view of the fast food market major fast food chains and their market shares The segmentation of the customers the consumers and the various parameters used to segment the customers The challenges faced by the industry New entrants in the industry and the strategies adopted by them Detailed study strategies adopted by McDonald and burger king The study of marketing strategies will consist of

History of both the players and the marketing strategies adopted by them over the years
The major failures in marketing strategy over the years Analyzing the products by using of GE matrix The strategies adopted by them in terms of distribution Strategies adopted by the companies in a new market Using Ansoffs matrix to analyze the strategies The strategies adopted by them for segmenting and targeting customers

Use of technology for marketing by both the companies Using of Co-creation for product development
Use of unconventional and emerging methods of marketing