CASE 06

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FAST FOOD RESTAURANT

• CASE 06
• MARKETING MANAGEMENT
• GROUP 06

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CONTENT

• INTRODUCTION
• SUBWAY SUCCESS FACTOR OF SUBWAY
• MCDONALDS
• HISTORY
• COMPETITOR
• 7P OF MCDONALDS
• NOWADAYS ISSUE
• RE-BRANDING THE MCDONALDS STRATEGY

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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.

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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

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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.

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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).

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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

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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.

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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.

Thailand
India
Dubai
Indonesia
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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.

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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 AW
  restuarant
• Subway
• The third largest fast food operator globally
  after Yum! Brands and McDonalds

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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.

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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.

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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.

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PRODUCT

• Hamburgers
• Various types of chicken sandwiches
• French fries
• Soft drinks
• Breakfast items
• Dessert
• Salads
• Vegetarian items
• Wraps

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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.

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PLACE

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

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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

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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

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PHYSICAL EVIDENCE

• Cleaness
• Speed
• Quality
• Transparency

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PROCESS

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

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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.

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Table McDonalds Revenue (dollars in millions)
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
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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.

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

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ENVIRONMENTAL ISSUE

• The biggest environmental nightmare for
  McDonalds
• Waste
• Packaging
• Global warming

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Obesity and Well being issue

• There is increasing concern about obesity rates
  and related risks to well-being, and a holistic
  approach by McDonald

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• 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 

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High-Quality Choices
Examples of nutrition information on the
packaging.
Communicate Responsibly particularly to the
children
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NUTRITION INFO
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Enviromental issue

• McD efforts on minimizing environmental impact of
  restaurants business

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• 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.

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• Sustainable Packaging Waste Management
  Continue exploring ways to reduce environmental
  impacts of consumer packaging and waste in
  restaurant operations.

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• 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.
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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

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

• Allowing franchisees to launch extensive
  experiments in food and décor, 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.

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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

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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.
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We believe in the McDonalds System

• The balance of interests among the three groups
  owner/operators, suppliers, and company employees.

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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.

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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

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• McDonalds serves as the Official Restaurant of
  the Olympic Games

McDonalds Champion Kids programs
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)
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We grow our business profitably

• Provide sustained profitable growth for our
  shareholders.
• Requires a continuing focus on customers and the
  health of the company.

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We strive continually to improve

• Anticipate and respond to changing customer,
  employee and system needs through constant
  evolution and innovation.

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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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Octawati Buntaran M987Z249
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