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Virtual University of Pakistan, Defence Road Lahore off Raiwind Road, Lahore
Introduction of Student
Last Degree obtained: Organization Name Experience: Designation: B. Com (Punjab University Lahore) Currently Working in Sui Northern Gas Pipelines Limited 7 years Functional Consultant
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Acknowledgement
All glory and honor is for ALLAH the only Supreme Being who gives me ability and courage to accomplish this project. I express my gratitude to my learned, competent & respected instructor, STA630 whose guidance, constructive comments, and encouragement throughout the work.
All respect for Hazrat Muhammad (PBUH) who taught me his attitude, to follow
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Dedication
Executive Summary
Consumers Satisfaction about McDonalds
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Virtual University of Pakistan As far as our project concern, the project is about Consumers
Though it is very huge subject in nature and our project activity is very time limited so I just concentrate upon the interest model of conventional and data was collected by structured questionnaire. Following are the important features found during research by starting research from Mc Donalds, Lahore; I implemented all the concepts in an effective manner by conducting research practice.
Mc Donalds is a fast food restaurant and it is the leading and one of the biggest fast food chains in Lahore. Its management is very good but still I found some problems during my practice research and also came to a conclusion at the end.
Table of Contents
Executive Summary..........................................................................................3 1. Introduction..................................................................................................6 1.1- Introduction to the Problem....................................................................7 Consumers Satisfaction about McDonalds Page 4
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1. Introduction
McDonald is the world's leading food service retailer with more than 30,000 restaurants in 121 countries serving 47 million customers each day. It is one of the worlds most well-known and valuable brands and holds a leading share in the globally branded quick service restaurant segment of the informal eating-out market in virtually every country in which they do business. McDonalds outstanding brand recognition, experience management, high-quality food, site development expertise, advanced operational systems and unique infrastructure ensure a position that enables it to capitalize on global opportunities. McDonalds plan to expand their leadership position through great tasting food, superior service, everyday value and convenience McDonalds rich history began with the founder, Ray Kroc. The strong foundation that he built continues today with McDonald's vision and the commitment of their talented executives to keep the shine on McDonald's arches for years to come.
VISION
cDonalds vision is to be the worlds best quick service restaurant experience. Being the best means providing outstanding quality, service and cleanliness, so that McDonalds make every customer in every restaurant smile. To achieve our vision we are focused on three worldwide strategies: Be the best employer for our people in each community around the world. Deliver optional excellence to our customers in each of our restaurants. Achieve enduring profitable growth by expanding the brand and leveraging the strengths of McDonalds system through innovation and technology.
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1.2- Objective
My objective is to make the best analysis to select the better quality product between Mc Donalds, KFC, Pizza Hut, and other fast food restaurant with competitive price. According to my view Mc Donalds product quality and price level are not matching as compare to its competitor like KFC & Pizza Hut providing same products with best quality with competitive price and services as compare to Mc Donalds. So I decide to conduct a research by using my research knowledge to find the consumer behavior regarding Mc Donalds products and whether the peoples are satisfied or not.
1.3- Significance
Before conducting my research, I would like to view the McDonalds current business position and found that it is one of the worlds most well-known and valuable brands and holds a leading share in the globally branded quick service restaurants segment of the informal eating-out market in virtually every country in which they do business. What are the reasons that mostly people prefer to its direct competitor KFC restaurants products than McDonalds. So definitely there are some factors which would be pointed out and I will try to focus my research on these factors.
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2 - Literature Review
HISTORY OF McDonalds
In 1932 the world was introduced to the first carhop drive-in. By the mid 1930's many drive-through cropped up across the United States. In 1937 Dick and Mac McDonald opened their first carhop in Pasadena, CA. Their establishment was very small but offered something nobody else did, "fast service". The McDonalds went from a carhop to a hamburger store, where customers could sit under a canopy and watch their food being prepared. The McDonald brothers soon realized that their competition was hot on their trail. The brothers opened up a restaurant entitled "Dimer" The name Dimer was to represent everything selling for a dime. In 1948 the McDonald brothers closed up all of their carhops for renovations. Their new establishments would include a service window with improved customer service. Their kitchens would be designed to handle fast food service. By the early 1950's the McDonald brothers owned many franchises but felt that they were not progressing as expected. In 1954 the brothers met an entrepreneur by the name of Ray Kroc. Mr. Kroc would soon become a legend in McDonald's history. He helped to expand the McDonalds name nationwide. Kroc became a part of the McDonalds team and formed a McDonalds franchise company called McDonalds System Incorporated. In 1960, Kroc changed this to McDonald's Corporation, which still remains today. In 1961 the McDonald brothers sold their entire rights to Ray Kroc for 3 million dollars. In 1962 the Golden Arches became the company logo. In 1961 McDonalds launched the All-American Meal. This promotion offered several meal combinations that were geared towards adults. McDonalds had still done very little to appeal to families and kids. In the late 1960's Kroc established a massive expansion project which would launch McDonalds to new heights. Kroc was a fast mover and quickly realized that he must capture the Media Market. The McDonald brothers had a franchiser named Goldstein who was finally going to get a shot at marketing things his way. Goldstein felt that he needed to approach the kid audience and enter the children's market place for food and entertainment.
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In 1969 McDonalds started a new search for a new promotion company. Needham, Harper and Steers were hired and they immediately went to work to launch a McDonald TV commercial.1970 the first McDonalds commercial appeared with signing employees dressed in uniforms. Needham also created McDonald land, which included an array of storybook characters. The lineup included; Ham burglar, Mayor McCheese, Grimace and Officer Big Mac. These characters quickly became famous and were loved and adored by children. In 1971 McDonalds has gone global and opened restaurants in Japan, Holland, Germany, Panama, Guama and Australia.1975 McDonalds celebrated its 20th anniversary and 10,000 students have graduated from the Hamburger University.1978 the introduction of the Happy Meal took McDonalds history by storm. The first promotion started in Kansas City and was called "CIRCUS WAGON". The toy resembled a toy box with a round top like a lunch box. In 1980 McDonalds went International in the following countries, Australia, the Caribbean, Hong Kong, Latin American and New Zealand. In 1984 Ray Kroc passed away and Ronald McDonald Children's Charities (RMCC) was founded in his memory. The name of the charity later changed to "Ronald McDonald House Charities (RMHC). By the end of 1987 McDonalds had served 20 million people a day in nearly 10,000 restaurants in 47 countries. The 1990's would prove to be a booming year for McDonalds. McDonalds was announced as the Official Restaurant for the Atlanta Olympics. The first Ronald McDonald House was opened in Paris. Ty, Inc. and McDonalds would produce a new line called Teenie Beanies that would turn out to be McDonalds hottest promotion ever!
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cDonalds Pakistan is part of the Lakson Group of Companies, a leading business house in Pakistan.
McDonalds first restaurant opened its doors to the people of Pakistan in September 1998 in Lahore. Karachi opened its first restaurant a week after Lahore. Today million of Pakistanis place their trust in McDonalds every day- trusting the company to provide them with food of a very high standard, quick service and value for money. McDonalds is firmly committed to giving back to the community where it operates. They are happy to become involved because they recognize that organizations have a role to play in helping communities to work successfully. The contribution they enjoy most is the experience of working together with others in the community to achieve worthwhile benefits for those who need it most. Now there are approximately 23 restaurants in some major cities of Pakistan. City Karachi Lahore Hyderabad Faisalabad Rawalpindi No of Outlets 8 9 2 3 1
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3- Problem Statement
I found different problems in my research. 1. General Statement Here I would like to share one consumers comments that have bad experience but some funny regarding McDonalds home delivery service. He states that six months ago my partner and I decided to have a quiet night home. Rather than going out for dinner that we had been doing for days, we decided to have a Mcdonald's delivered at our place because "Mcdonalds main hai kuch baat". Little did we know what we were going to be in for? We placed the order at 9:27 p.m. and were told that we shall be served within 30 minutes. Hence started our wait! The delivery man didn't arrive even after 45 minutes. We were starving by then, so I decided to call Mcdonalds again to check the status of my order. I was informed that the order hadn't even gone through due to some problem (Now how good was that...?). It was in their system but hadn't gone through...!! I was told that I will get my meal delivered within 20 minutes. After waiting for another 30 minutes and getting hunger pangs at the sound of every passing motor bike, I called McDonalds again. I was told that the delivery man had just left with my order. I asked for some kind of compensation as it was too much. I was told by the Complaint Manager that I could a free burger but as the delivery man had left already it could not be delivered along with rest of the order. Shocked, I started waiting again, when my cell rang with the Mcdonald's number flashing. This was the delivery man, asking for directions.....he hadn't left Mcdonald's yet. (Can you beat that....?). I gave him the due instructions and called the Compliant Manager again....But couldn't get through....! Finally the delivery man arrived there 11:15 p.m, with the order but without the compensatory burger. I called the complaint manager again and he said very casually that would be delivered later.....!! This was the height of it...! So I told them that I would not be paying until I get my compensation....and told the delivery man the same. Poor man he didn't know anything about the whole situation. Anyways he left and I brought my compensation within 15 minutes....! We were so starved by then that we really needed that second burger....!
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2- Article as received (not authentic prove) McDonalds, Burger king, Time Zone... All places with ball pits in the children's play area. I urge each and every one of you to pass this on to as many people as you can. I cannot stress how important this is! Hi. My name is Ameen, my son Nouman and we stay in one of the state of U.A.E, I took my only son to McDonald's for his 3rd birthday. After he finished lunch, I allowed him to play in the ball pit. When he started whining later on, I asked him what was wrong, he pointed to the back of his pullup and simply said 'Mommy, it hurts.' I couldn't find anything wrong with him at that time. I bathed him when we got home, and it was at that point when I found a welt on his left buttock. Upon investigating, it seemed as if there was something like a splinter under the welt. I made an appointment to see the doctor the next day, but soon he started vomiting and shaking, then his eyes rolled back into his head. From there, we went to the emergency room. He died later that night. It turned out that the welt on his buttock was the tip of a hypodermic needle that had broken off inside. The autopsy revealed that he had died from a heroine overdose. The next week, the police removed the balls from the ball pit. There was rotten food, several hypodermic needles: some full, some used; knives, half-eaten candy, diapers, feces, and the stench of urine. McDonalds, Burger king, Time Zone... All places with ball pits in the children's play area. One of my sons lost his watch, and was very upset. We dug and dug in those balls, trying to find his watch. Instead, we found vomit, food, feces, and other stuff I do not want to discuss. I went to the manager and raised hell. Come to find out, the ball pit is only cleaned out once a month. I have doubts that it is even done that often. My kids will never play in another ball pit. Some of you might not be parents, but you may have nieces, nephews, grandchildren, or friends with children. This will pertain to you too. As I read the following, my heart sank. Don't think it's just McDonald's either. A little boy had been playing in a ball pit @ a Burger King & started complaining of his legs hurting. He later died too. He was found to have snake bites all over his legs & buttocks. When they cleaned
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Ingredients:
Following were the ingredients for both the products.
Quarter Pounder: Oil seed bun (baked) Mustered Sauce Ketchup White Onion Pickles Cheese slice Beef Pattie (1 qty) (1/4 tea spoon) (1 table spoon) (2/4) (2 qty) (2 qty) (1/4th qty)
Egg n Beef Burger: Plain bun (baked) Mustered sauce Ketchup Dehydrated onion Pickle Cheese slice (1 qty) (2/3 tea spoon) (1/2 table spoon) (18-20 grains) (1 qty) (1 qty) Page 13
Testing:
Before launching the Egg n Beef Burger Mc Donalds called their loyal customers via phone on specific date and time. They offered them their new product with comment card to take the feed back. In the response of their feed back they decided to launch their product regardless the result of feed back was below the desired standard because their emphasis was on the cost factor and to maximize the profit.
o o
Earlier the egg n beef burger is launched alone Meal package Egg n beef Burger + Croquettes + Drink o Meal package Egg n beef burger + Fries + Drink
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4.1-Method of Research
During my research I found that MacDonalds had conducted the survey before launching the egg n beef burger .They call their regular customer to their store to taste the egg n beef burger .The feed back from the customer is not on to the desired expectation and the standards. Ignoring the Feed back and suggestion of the customer they prior the benefits which is to replace existing product with the egg n beef burger
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MacDonalds
Time: _______ Date: _______ Name: _____________________________ Age: ______yrs Gender: Quality: Taste: Presentation: r: Male Satisfactory Satisfactory Satisfactory Female Good Good Good very Good very Good very Good Excellent Excellent Excellent
4.4-Statistical Analysis
The result is derived from the comments card which directs the Marketing manager to take the decisions for the new product to launch it or to modify the existing product. But the suggestions/feed back was not according to the target If the result was up to the feed back standards, than they had to launch the product but the result for the egg n beef burger was below the normal feed back standard. Mostly customer had rated the burger as poor taste. Despite of knowing all that factors they decided to launch the egg n beef burger.
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5- Hypothesis
1-Null Hypothesis Ho-There is no relation between promotion and consumer satisfaction Alternative Hypothesis HaThere is a relation between promotion and consumer satisfaction 2-Null Hypothesis Ho-There is no relation between price and consumer satisfaction Alternative Hypothesis HaThere is a relation between consumer price and satisfaction And same on quality and packing
6- Research Design
6.1 Classification of research
My research was descriptive and detailed considering all aspects of the product as well as competitors products and quality level also.
6.2 Population
In this survey my focus of research was middle and upper classes of peoples because in Pakistan the lower class People have fear of spending more because they cant afford these burgers and peoples were from different area not only from specific area.
6.3 Sample
I meet up 20-25 peoples
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Organization Structure
Operational Director
Quality Assurance
H.R Department
Operations
Marketing
Regional Product:
Hot drinks
Deserts:
Strawberry sundae Chocolate sundae Strawberry shake Vanilla shake Chocolate shake Apple pie
Local:
AFC Dixie chicken Liberty Burger
7.3-Market Share
The total market share of Mc Donalds in Pakistans is 75 %.
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Middle class
Educated, life style and status conscious people belong to the middle class. Because the people of this class are sensitive and love to follow the new trend and are self esteem.
Lower class
People who have fear of spending more and prefer to buy low price products like Rs.15 Cone, because the people of this class dont feel deprivation, so to generate the association with those people Mc Donalds has launched Rs. 15 Cone to eradicate this misconception.
Chicken Big Mac, Quarter pounder Cheese, 9 Pieces chicken Mc Nuggets 260/each
270/each
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arketing strategy basically depends upon the Marketing Mix. In Pakistan mostly people are price conscious. Therefore Mc Donalds emphasizes on the pricing strategy. The prices of same products vary from region to region and also within the region in different branches. The pricing strategy differs due to different market segmentation and targeted market. Mc Donalds has open more branches in different areas within the cities and also in different cities to cover more market segments. Different strategies are adopted to promote the products, like advertisements, tray liner and broachers. Mc Donalds offer different products apart from their core products as flour flavor products that are basically the fore season products which are offered for 2-3 months or on specific occasions like Eid, summer holidays, winter holidays, Christmas to boost up their sales. International products are provided to customers in local market to give a different touch to the customers.
Burgers
The McLean Deluxe was marketed as a healthy alternative to McDonald's regular menu. It was released in the United States in 1991. It had a reduced fat content compared to other McDonald's hamburgers. This was achieved through use of 97% lean beef and the addition of carrageen and to the meat. The McLean Deluxe was originally designed as a replacement of the McDLT. Like the McDLT, and despite performing well in taste-tests, it did not sell well and was dropped from the menu in 1994. The Arch Deluxe was another product to compete against the Burger king Whopper sandwich. It had hickory bacon, onions, tomato, ketchup, lettuce, American cheese, and a mustard and mayonnaise based Chef's sauce
The Grilled Chicken Deluxe sandwich and light mayonnaise, lettuce and tomatoes; additional sauces to replace the mayo were available. The sandwich was targeted to the female and health conscious markets. The Crispy Chicken Deluxe replaced the Mcchicken sandwich and had mayonnaise, lettuce and tomatoes. The old McChicken has been brought back as the McChicken Classic on the Dollar Menu. The Fish Filet Deluxe replaced the Filet-O-Fish sandwich and had tartar sauce, American cheese and lettuce. The fish patty was 50% larger than the original fish fillet used in the Filet-O-Fish. After the Fish Filet Deluxe was dropped, the larger fish patty was used in the current Filet-O-Fish
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Potted plants at a McDonald's In April 2008, McDonald's announced that 11 of its Sheffield restaurants have been using a biomass trial that had cut its waste and carbon footprint by half in the area. In this trial, waste from the restaurants were collected by Veolia and used to produce energy at a power plant. McDonald's plans to expand this project, however the lack of biomass power plants in the U.S. will prevent this plan from becoming a national standard anytime soon. In addition, in Europe, McDonald's has been recycling vegetable grease by converting it to fuel for their diesel trucks. Furthermore, McDonald's has been using a corn-based bio plastic to produce containers for some of their products. Although industries who use this product claim a carbon savings of 30% to 80%, a Guardian study shows otherwise. The results show that this type of plastic does not break down in landfills as efficiently as other conventional plastics. The extra energy it takes to recycle these plastic results in a higher output of greenhouse gases. Also, the plastics can contaminate waste streams causing other recycled plastics to become unsalable
7.5-Product: Egg n Beef Burger Maximizing the Profit minimizing the cost
Product cost is the core issue for any organization to take all the important decisions related to the product. The manufacturing cost of the egg n beef burger was Rs: 19 and the consumer price Rs: 49.The management found the low-cost of this burger and the profit margin in this burger is so high and the management were looking forward to replace it with their well running burger whose feed back is extremely positive which is the Quarter Pounder. But the cost is little bit high than the egg n beef burger. The manufacturing cost of the Quarter Pounder was Rs: 49 and the consumer price were Rs: 99. The profit margin in Quarter Pounder was low rather than egg n beef burger. Management of the MacDonalds decided to replace the existing burger with egg n beef burger
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QUESTIONNAIRE
Q1
Q2
From which social class do you belong? Businessman Civil service Professional
Q3
what is your monthly income? 10000-20000 20000-50000 50000-100000 More then 100000 What would you like to prefer in your Meal? Q5 Pizza Burger Others
Q4
From where would you like to have burger in meal? Pizza Hut KFC Mc Donalds
Q6
What will you prefer KFC, Pizza Hut or Mc Donalds & why? ________
Q7
Whats quality of Mc Donalds burger? Satisfactory Good very Good Excellent On your childs birthday, where you would prefer to arrange a party? ___________
Q9.
Q10
Q11
9. Findings
On the basis of these interviews and research questionnaires I got the following results:
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Q1
What is your age? The average age of the respondents was 35 years
Q2
From which social class do you belong? Although most of the customers who eat burger belonged to the middle and upper level but some of the respondents were not regular customers.
Q3
what is your monthly income? Monthly income of respondents was around Rs.20000.
Q4. What would you like to eat in your meal? Majority of the middle class people replied that they prefer Mc Donalds, KFC but in routine they cant afford so only twice or three times in a month they can eat burger. Q5 What Burger would you like to eat in following? Majority of the respondents replied that they like KFC burger because the quality of KFC burger is better than Mc Donalds and others. Q6 What will you prefer KFC, Pizza Hut or Mc Donalds & why?
No doubt KFC burger is most popular but Most of the respondents particularly Family holders Prefer Mc Donalds because Mc Donalds provide some extra benefits for children events like joy land etc. to arrange their events and also provide gifts to children on their events. Q7 How often do you eat burger? Once a week Q8 Whats quality of Mc Donalds burger? Good but not excellent
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