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

2001

2002

14,243

14,870

15,406

Operating Income

3,330

2,697

2,113

Net Income

1,977

1,637

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.

Octawati
Buntaran
M987Z249