Answered: What risks do you think McDonald’s will…

Principles Of Marketing

17th Edition

ISBN:9780134492513

Author:Kotler, Philip, Armstrong, Gary (gary M.)

Publisher:Kotler, Philip, Armstrong, Gary (gary M.)

Chapter1: Marketing: Creating Customer Value And Engagement

Section: Chapter Questions

Problem 1.1DQ

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Answer it in attractive bullets with suiatable headings

From the case-study – McDonald’s
What risks do you think McDonald’s will face in the future?

Transcribed Image Text:Marketing Excellence offerings faled on many fronts. Product launches like pizza, the Arch Deluxe, fajitas, and deli sandwiches did not connect with consumers, nor did tweaks to the cur- rent menu like multiple changes to the Big Mac special >> McDonald's McDonald's is the world's leading hamburger fast-food sauce. Jim Skinner, McDonald's former chief executive, chain with more than 34,000 restaurants in 119 coun- explained, "We got distracted from the most important tries. More than 80 percent of McDonald's restaurants are thing: hot, high-quality food at a great value at the speed owned and operated by franchisees, which decreases and convenience of McDonald's." the risk associated with expansion and ensures long-tem tenants for the company. McDonald's serves 70 milion fort called the Plan to Win. Still in effect, the plan helped people each day and promises an easy and enjoyable McDonald's restaurants refocus on offering a better, food experience for its customers. McDonald's Corporation dates back to 1955 when and cheap fast-food option. Its "playbook" provided Ray Kroc, a multi-mixer salesman, franchised a ham- strategic insight on how to improve on the company's 5 burger restaurant from the McDonald brothers. Kroc Ps-people, products, promotions, price, and place-yet named it McDonald's and offered simple foods such as allow local restaurants to adapt to different environments the famous 15-cent hamburger. He helped design the and cultures. For example, McDonald's introduced a building, which featured red and white sides and a single Bacon Roll breakfast sandwich in the United Kingdom, golden arch that attracted local attention. Just 10 years a premium M burger in France, and an egg, tomato, and later, McDonald's had expanded to more than 700 U.S. pepper McPuff in China. Prices also varied slightly across restaurants, and the brand was on its way to becoming a the United States to better reflect different regional tastes. household name. During the 1960s and 1970s, Kroc led McDonald's pany around included offering more chicken options as growth domestically and internationally but always re- beef consumption started to decline, seling milk in a inforced the importance of quality, service, cleanliness, bottle instead of a carton, and removing "Super Size" and value. The menu expanded to include iconic items options after the documentary "Super Size Me" targeted such the Big Mac, the Quarter Pounder, the Happy Meal, McDonald's and its link to obesity. The company re- Filet-O-Fish, and breakfast items like the Egg McMuffin. sponded to customers' desire for healthy foods with pre- The company ramped up its advertising as well. To target mium salads and apple slices instead of French fries in its its core audience-children and families-it introduced Happy Meals. It also dismissed claims of "mystery meat" Ronald McDonald during a 60-second commercial in by introducing all-white-meat McNuggets. 1965. Soon, characters like Grimace, the Hamburgler, and Mayor McCheese made their debut in McDonald's charged a premium price. Meanwhile, McDonald's tar- advertising and helped lure children into its restaurants for geted teenagers and its lower-income consumers with familiar food and a fun experience. In 1974, McDonald's opened the Ronald McDonald its drive-thru service, added more snack options, and House, a charitable cause to help children with leuke- refurbished restaurants with leather seats, warm paint mia. Since then, it has expanded into a global effort colors, Wi-Fi, and flat-screen TVs. In many locations it called Ronald McDonald House Charities that consists of created three different "zones" that fit the needs of each three major programs: Ronald McDonald House, Ronald target audience: a linger zone with comfortable sofas McDonald Family Room, and Ronald McDonald Care where teenagers could hang out and socialize, a family In 2003, McDonald's implemented a strategic et- higher-quality consumer experience rather than a quick Some changes that initially helped turn the com- Many of these healthier options targeted moms and the introduction of the $1 menu. The company improved zone with tables and chairs that could easily be reconfig- Mobile. McDonald's aggressively expanded overseas during ured, and an efficient zone for consumers who needed to the 1980s by adding locations throughout Europe, Asia, grab a quick bite and go. the Philippines, and Malaysia. However, this rapid growth led to many struggles during the 1990s and early 2000s. revenues increased 33 percent and share price soared The company lost focus and direction as it added as 170 percent. In 2008, McDonald's was one of only two many as 2,000 new restaurants a year. New employees companies in the Dow Jones industrial average whose weren't trained fast enough or well enough, which led to share price rose during the worldwide recession. Sales poor customer service and dirtier restaurants. In addition, continued to increase, and in 2012, McDonald's experi- new healthier-option competitors popped up such as enced record revenues of $27 billion. Subway and Panera Bread. Consumers' tastes and eating trends also started through global growth and product expansion. For ex- to change in the early 2000s, and McDonald's new food ample, the successful introduction of McCafé directly Initial results were staggering: from 2003 to 2006, Today, McDonald's increases its consumer base

Transcribed Image Text:targeted consumers in the booming coffee industry and 2. How has McDonald's grown its brand equity over stole share from companies like Starbucks, Dunkin' Donuts, and Caribou Coffee. It is a good example of how McDonald's works to appeal to new consumers and aims to stay relevant through the years. Its current campaign, 3. What risks do you think McDonald's will face in the "I'm Lovin' It," seems to connect with McDonald's large consumer base and koep them coming back again and again. the years? Has McDonald's changed in different economic times or in different parts of the world? Explain. future? Sources: Andrew Marin, "A MDorakds, the Hepiet Meal is Hot Protts," The New Kk Times. Janury 10, 2000, Jaret Adamy "MDarakts Seka iry to Keep Sizting aN Shreet umat Mach 10. 2009. Mat verlu, "McDonaits Thirka abaut the Bo" Businesmeek, Decenber 8. 2000. Jessika Wo, TADonaids CEO: Taugh Economy, but Some Thastig." eulers. April 17. 200 "ertrands Best Ghal Brands 2012 ntertrant con Hance Crain "Has Tine Run Out Questions 1. What are McDonald's core brand values? Have these changed over the years? tor MDerai Brand Cvanicde ater 10 yeara" Ad Apn. Decenter 2. 2013, MeDanaids 2012 Amal eport

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