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Differentiation & Positioning Group 5 Case Study.

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Presentation on theme: "Differentiation & Positioning Group 5 Case Study."— Presentation transcript:

1 Differentiation & Positioning Group 5 Case Study

2 Group Members Mauricio Gonzalez Bui Thi Huy Chantharas Kanchanakool Nina Krapf Vincent Tenchavez Julia Vassiljeva

3 Outline I.Fastfood Turns Healthy II.Repositioning for a global future A.Analysis/Key Issues B.International Marketing Strategy III.Globalization

4 Fast Food Turns Healthy By: Thuy

5 Fast Food : Term for food that can be prepared and served very quickly Fast food history depended on the location, uniqueness and various culture. Ex : 1. Ancient Romans  Bread and Olive stands, 2. East Asian  Noodle Shops 3. Middle East  Flat bread and Falafed Fast Food History

6 Nowadays, fast food became one of the world’s fastest growing industry. WHY : People love fast food because it tastes GOOD and is reasonably priced. Fast Food History

7 Top 10 Global Franchises for 2008 Subway KFC Corp. McDonald's Dunkin' Donuts Domino's Pizza LLC Curves RE/MAX Int'l. Inc. Sonic Drive In Restaurants Pizza Hut UPS Store, The/Mail Boxes Etc. Data taken from Subway KFC Corp. McDonald's Dunkin' Donuts Domino's Pizza LLC Curves RE/MAX Int'l. Inc. Sonic Drive In Restaurants Pizza Hut UPS Store, The/Mail Boxes Etc. arkets.jpg arkets.jpg in 2007 Fast Food Industry

8 Subway restaurants, commonly known as Subway, started in July, 1965 Primarily sells sandwiches and salads called “sub” The owner is Doctor’s Associates, Inc. (DAI), and has over 30, 016 franchised units in 88 countries as of October 2008 SUBWAY = Jared Diet at the year 2000 Subway

9 Jared saw the new healthier sandwiches and decided it was time to go on diet. For lunch: it would be a six-inch turkey, no mayo, no oil, and hold the cheese. For dinner: a foot long veggie sub, a bag of baked potato chips and beverage. The Jared Diet

10 Subway is the third largest fast food operator globally after Yum! Brands (35,000 locations) and McDonald's (31,000 locations). The first international location opened in December of 1984 in Bahrain. Revenue ▲ USD 9.05 billion (2006)US Employees 167,823 (2003) Subway

11 Repositioning for a Global Future By: Mod

12 Simple principles… QUALITY SPEED CLEANLINESS Early Days and Dash for Growth

13 Expansion of new stores both in the U.S. and globally Up to March 2007, over 31,000 McDonald’s restaurants operating in more than 119 countries around the world During it’s golden years in the 80’s

14 McDonald’s in the orld

15 Total revenue and Net income of McDonald’s from 2000 to 2008 Dollars in millions Year

16 However… Because of its lucrative business, it caused cannibalization Campaign 55 was launched but failed. Loss of profitability McDonald’s Cannibalization

17 Focus on expansion failed to notice its competitors Other brands overtaken McDonald’s in terms of customer’s appeal, quality, speed and cleanliness In 2001 according to the American Customer Satisfaction Index Survey, McDonald’s ranked almost at the bottom Competition

18 McDonald’s was at a loss for the first time in 48 years Store-opening programmes cut from 1,000 in 2002 to less than 400 in 2003 In 2002

19 Reduction of price But it’s not just about the price Customers look for varieties and become more health conscious Some local brands offer adaptation in local taste Solution?

20 In 2004 The Subway brand was only becoming recognized in the UK. But in the US and Canada it has overtaken McDonald's as the number one fast food chain, and sells almost 2,000 sandwiches a minute from 21,052 outlets in 74 countries. The holding company's profits are not disclosed as it is privately owned, although it says global sales in 2002 were $5.7bn (£3.2bn). By 2008 it has become trendier among teenagers than McDonald’s. Comparison

21 McDonald’s has been taken into court over the allegation that their food can lead to obesity. Litigation and Health

22 Analysis/Key Issues By: Julia

23 Increasing price of raw materials Regulatory issues Agitations by social organizations Recession Competition Increasing fuel prices Changes in the Environment

24 Product range is becoming wider: Coffee War Between McDonald´s and Starbucks. Value against price; innovation against tradition; selectiveness against ubiquity Changes in the Competition Product innovation, customer satisfaction, and differentiated promotions are of utmost importance – now more than ever.

25 Market Share FFHR 2008


27 Changes in the customer wants and needs Convenience and time are priorities Placing orders through internet is preferred over telephone, which shows consumers´ inclination toward convenience. Health is Wealth: 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

28 McDonald’s success factors branded affordability, menu variety and beverage choice, convenience & day part expansion, ongoing restaurant reinvestment operational excellence “We believe locally-owned and operated restaurants are at the core of our competitive advantage, making us not just a global brand but also a locally relevant one”.

29 Focus on being better, not just bigger Understanding consumers’ needs and wants facilitating greater sharing and adoption of best practices and new ideas worldwide leveraging a strategic approach to implementing initiatives to drive the best bottom-line impact McDonald’s success factors

30 International Marketing Strategy By: Vince

31 International Marketing Strategy McDonald’s wants to win back the hearts of the most important demographic to have deserted McDonald's - young adults. McDonald's means different things to different people and doesn't have one brand position.

32 International Marketing Strategy ich liebe es (Germany) i’m lovin’ it (US) c’est tout ce que j’aime (France) love ko ‘to (Philippines) c’est ça que j’m (Canada) вот что я люблю (Russia) man tas patīk (Latvia) The first global campaign launched in Sept. 2, 2003:

33 International Marketing Strategy Larry Light Chief Global Marketing Officer *developed by Heye & Partners in Unterhaching, Germany “i’m lovin’ it*” is all about the revitalization of the McDonald's brand, with a global burst of instant energy.

34 International Marketing Strategy “i’m lovin’ it” is the centerpiece of a new marketing strategy that will connect McDonald’s with customers highly relevant, culturally significant ways around the world.

35 International Marketing Strategy - it’s a new way of thinking about and expressing McDonald’s worldwide brand appeal to the consumer. - unprecedented in McDonald’s history as more than 100 countries unite behind a single brand message to the customers

36 International Marketing Strategy Mcdonald’s also utilized: -promotions - public relations - restaurant merchandising, - and overall brand communications initiatives Light has the budget for the fire-fight - $1.2B a year. The bulk of it has gone on TV advertising.

37 International Marketing Strategy Several of the English language spots feature vocals by 2003 Triple MTV Video Music Award Winner, Justin Timberlake.

38 International Marketing Strategy Awareness of “i'm lovin' it" in McDonald's top ten countries is 86 per cent; 89 per cent with young adults 87 per cent among "moms" -no doubt aided by a menu with healthier options. Comparable second-quarter global sales are up 7.8 per cent (2004), the biggest Q2 jump since 1987.

39 Globalization By: Nina/Mauricio

40 Globalization means a trend toward greater economic, cultural, political and technological interdependence among national institutions and economies. Reduced barriers lead to freer trade and flow of goods, capital, people, services and ideas. Globalization

41 Falling Barriers to Trade and Investment: GATT (General Agreement on Tariffs and Trade) WTO (World Trade Organization) Regional Trade Agreements (NAFTA, EU, APEC, …) Technological Innovations: E-mail and videoconferencing Internet Company intranets Advancement in transportation technologies Driving Forces

42 Reasons why global strategies sometimes fail in their objective to achieve a global marketing advantage: Different cultures  people in different countries don’t have the same ideas and ideals concerning special topics, no consideration of local cultural believes Resistance by local branches or governments  increasing militancy of local trade unions Different law guidelines Political unrest or war

43 Rationale behind mega mergers and major acquisitions: Problems from one single company can shift away due to merging  no longer fighting the tide but swimming with it…. Opening new markets  boosting customer retention and gaining new customers in different geographic areas

44 Technology advantages  two or more companies share their know- how Cost advantages  sharing facilities, know-how and employees may lead to cost reduction Rationale behind mega mergers and major acquisitions:

45 Problems occurring due to mega-mergers: Eroding of shareholder value Loss of organization’s culture due to integrating into another company Detriment of innovation  merged company may become too inward- looking Disadvantages for workers and employees Worse working contracts

46 What are the critical success factors in developing a global brand? What additional factors would you consider to be necessary in developing a successful global e-business brand?

47 The critical success factors for develop a global brand alternativesvarieties prices advertisements ADAPTED according to the CULTURE and CUSTOMS of the PLACE

48 …aditional factors to develop a global e- business brand MAIN web page (global) SPECIFICS web pages (country) CONSOLIDATE and UNIFY the GLOBAL IMAGE

49 What are the main challenges that are faced by international managers in managing and controlling a global marketing strategy? What advice would you give to a manager with this responsibility?


51 Thank you!

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