1. CASE 06 MARKETING MANAGEMENT GROUP 06
FAST FOOD RESTAURANT
CASE 06
MARKETING MANAGEMENT
GROUP 06

2. CONTENT INTRODUCTION SUBWAY : SUCCESS FACTOR OF SUBWAY MCDONALD’S
HISTORY
COMPETITOR
7P OF MCDONALD’S
NOWADAYS ISSUE
RE-BRANDING : THE MCDONALD’S STRATEGY

3. 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.

4. 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

5. WHY FAST FOOD RESTAURANT GROWS FASTLY?
With today’s 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.

6. 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).

7. 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

8. McDonald’s
McDonald’s 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.

9. McDonald’s
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

10. McDonald’s
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 McDonald’s the brand name that defined American fast food.

11. 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

12. 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.
Franchising is one of the only means available to access venture investment capital without the need to give up control of the operation of the chain in the process.
The corporations' revenues come from the rent, royalties and fees paid by the franchisees, as well as sales in company-operated restaurants.
Since its inception, training at Hamburger University has emphasized consistent restaurant operations procedures, service, quality and cleanliness. It has become the company’s global center of excellence for McDonald’s operations training and leadership development.

13. McD MISSION
“McD mission is to be the world’s 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.”

14. 7P OF McD
McDonald’s overall strategic plan is called Plan to Win: created better McDonald’s experiences through the execution of multiple initiatives surrounding the five factors of exceptional customer experiences – product, price, place, promotion, people, physical evidence, process.

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

16. PRICE
McDonald’s has a unique pricing strategy that falls solely on their many product lines.
The most notable and recent example of this is McDonald’s “Dollar Menu”.
“Dollar Menu”: was created because McDonald’s recognized that the economy was in a decline and that their competition was getting fiercer.
The Dollar Menu satisfies the current decreasing economy and has increased the pressure towards competitors. You can get a number of products off of their menu for only a dollar. It is efficient and practical.

17. PLACE Number of locations more than 31,000 worldwide.
Type of restaurant :
counter service
drive-through service
gas stations
convenience stores
shopping mall
McStop
Mcstop services can be found at truck stop.

18. PROMOTION
Happy meals
McDonald’s used to give children a choice between toys, milk, fruit, or vegetables as part of their Happy Meals.
Slogan “I’m Lovin’ it”
McDonald’s is building their brand image “with innovated marketing transporting ideas across borders and using i’m lovin’ it to deepen their connection with customers who love their food and the unique McDonald’s experience

19. 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
the development of their employees starting with recruitment and training and leading all the up to leadership and management.
In order to motivate their employee, they give them stars as per their performance.

20. PHYSICAL EVIDENCE
Cleaness
Speed
Quality
Transparency

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

22. FALLEN OF McD
In 2002, McDonald’s posted its first loss. Earnings were $893.5 million, down 45 per cent from $1.64 billion in 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 to 2002 just increased for 3.6%.

23. Table : McDonald’s Revenue (dollars in millions)
2000
2001
2002
Total Revenue
14,243
14,870
15,406
Operating Income
3,330
2,697
2,113
Net Income
1,977
1,637
893
Source: McDonald’s financial report 2004
Net Income ( )= (893-1,637)/1,637= 45.5%
Total Revenue ( ) = (15,406-14,870)/14,870 = 3.6%

24. 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.

25. HEALTH ISSUE Obesity Food poisoning
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 .
The American Medical Association had condemned the hamburger as the leading source of saturated fat in the American diet.
According to a 2003 study conducted by RTI International in North Carolina, the cost of health care in America is said to increase by $93 billion a year, mainly from Type 2 diabetes and heart disease, both associated with obesity.
Fast food : trans fats, high calories, and low fiber.

26. ENVIRONMENTAL ISSUE
The biggest environmental nightmare for McDonald’s :
Waste
Packaging
Global warming
If there are so many millions or even billions of hamburgers, or chicken nuggets, or French fries sold each year, then imagine all the packaging that is thrown to waste.

27. Obesity and Well being issue
There is increasing concern about obesity rates and related risks to well-being, and a holistic approach by McDonald

28. 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 

29. High-Quality Choices
Examples of nutrition information on the packaging.
Communicate Responsibly particularly to the children

30. NUTRITION INFO

31. Enviromental issue
McD efforts on minimizing environmental impact of restaurants business

32. Energy efficiency – Find further ways to increase energy efficiency in restaurants to save money and reduce our environmental impact.
In 2007 and 2008, McDonald’s was ranked second among food service companies by Climate Counts, designating the company in the organization’s “Starting” category, as a “better choice for the climate conscious consumer.”
McDonald’s 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, McDonald’s USA was named an Energy Star Partner of the Year by the U.S. Environmental Protection Agency.

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

34. 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.
McDonald’s France
Beaugrenelle restaurant
in Paris with an array of
sustainability enhancements
and environmentallythemed
decor.

35. Re-branding: the McDonald’s strategy
McDonald’s Value
We place the customer experience at the core of all we do
We are committed to our people
We believe in the McDonald’s System
We operate our business ethically
We give back to our communities
We grow our business profitably
We strive continually to improve

36. We place the customer experience at the core of all we do
Allowing franchisees to launch extensive experiments in food and décor, launching “I’m lovin’ it” marketing theme
Providing the customers with high quality food and superior service, in a clean, welcoming environment, at a great value.

37. 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

38. People Priority: McDonald’s 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.

39. We believe in the McDonald’s System
The balance of interests among the three groups : owner/operators, suppliers, and company employees.

40. We operate our business ethically
McDonald’s conducts its business to high standards of fairness, honesty, and integrity. And the people are individually accountable and collectively responsible.

41. We give back to our communities
Support Ronald McDonald House Charities
Support World Children’s 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
A Ronald McDonald House (named after Ronald McDonald) is a place where the parents of children that are in a nearby hospital can stay at night for reduced or no cost.

42. McDonald’s Champion Kids programs
McDonald’s serves as the Official Restaurant of the Olympic Games
McDonald’s Champion
Kids programs
More than 930 restaurants, McDonald’s 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)

43. We grow our business profitably
Provide sustained profitable growth for our shareholders.
Requires a continuing focus on customers and the health of the company.

44. We strive continually to improve
Anticipate and respond to changing customer, employee and system needs through constant evolution and innovation.

45. 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.

46. Octawati Buntaran
M987Z249
Thank you