McDonald’s Case Study

McDonald’s Case Study

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McDonald’s Case Study

Question 1

One of the changing customer tastes within the industry is the deviation towards non-hamburger sandwiches. Related to this trend is that of consuming prepared meals and other packed foods. This trend is fuelled mostly by the need to seek out healthier alternatives within the fast food sector. The trend of placing pre-packaged foods in the supermarkets and convenience stores meets the needs of most shoppers and eliminates geographical limitations. Another change in consumer trends is the combination of fast services with high-quality products. Modern day consumers seek quality menus and increased arrays of meals within the context of an ordinary fast food establishment. These changing consumer tastes have a significant impact on financial and marketing decisions made by McDonald’s. In terms of marketing changes, the establishment has had to introduce changes in the menu to include “New Taste Menus.” These new items have been added to ensure that the company remains competitive. The changes in consumer tastes have also seen McDonald’s net income drop by 17%.

Question 2

            Customer tastes and preferences are changing at a rapid rate, and this affects the management’s speed of changing their marketing strategies. Additionally, the detailed nature of the changes complicates the rate of receiving the changes. It is imperative that the major fast food establishments such as McDonalds and KFC take care before they can adopt changes. Making the decision to reflect customer preferences is done gradually to ensure that the company does not invest in a short-lived food trend (Chow, Dickson & Wong, 2013). Most market research is used to collect sufficient data on the exact popularity and preferences for these new meals or food products before overall changes are made. Therefore, the reflection of the changes is relatively fast especially in instances where research data was accessible.

Question 3

            McDonald’s strength is that they have invested heavily in advertisement and promotion of its core food products. The fast food company is focused on marketing its wide range of foods as delicious and healthy. Additionally, the company also has strong support from members that make up the biggest percentage of its customers. Another one of McDonald’s strength is that they have a positive public image at the international and national levels. The company is renowned for its high standards across all its franchises (Chow et al., 2013). McDonald’s has a weakness in that they still cannot reach a major section of the consumers categorized as heavy beverage consumers. Another McDonalds’ weakness is that they have similar offerings to other competitors such as KFC, Burger King, and Wendy’s (Hinestroza, & James, 2014).

Question 4

            Developing a separate strategy to handle the heavy user segment will be necessary. One, it is a relatively new market niche that demands additional data collection on the popularity and level of investment required to implement the new menus. It is imperative to collect information on the number of heavy users, the types of meals they prefer as well as the costs that the establishment will incur. McDonald’s has had a strong customer base comprising of all family members. Introducing a completely new segment will need deliberate market research (Hinestroza, & James, 2014).

Question 5

            One of the ways through which McDonald’s can increase their market share is through reinforcing the existing menus and meal packages. For instance, the all-day breakfast should be introduced in all the McDonalds premises as it has shown promising results because of its main target, the family. Another strategy is restoring to the conventional recipes and meals that attracted patrons in the first place. For instance, the Egg Mc Muffin has always been a preferred meal for most breakfast consumers (Chow et al., 2013). This was made possible by changing the recipe back to using butter instead of margarine. McDonald’s can grow their sales margins by ensuring that they have a positive image to the public. Currently, it is struggling to fight the poor reputation concerning the quality of their food. This has made the company lose their customers to competitors such as Chipotle Mexican Grill (Hinestroza, & James, 2014). In terms of increasing the profits, McDonald’s can do this by reducing the operational expenses. Streamlining the menu, service delivery and other tasks within the establishment allows the fast food company to reduce its personnel costs significantly (Paul & Roy, 2014).

Conclusion

            Most of the fast food companies such as KFC, Wendy’s, McDonald’s and Hardee’s have almost similar marketing, public relations, and financial needs. Regarding changes in the consumer tastes and preferences, it is clear that most patrons change their needs forcing fast food providers to adapt quickly (Chow et al., 2013). The most frequent change involved a preference for quality menus and increased the array of meals within the context of an ordinary fast food establishment. In the modern fast food industry, there is an increasing need embrace customer changes without affecting their revenue streams. The challenges lie in ensuring that regardless of the changes made, the market share and sales margins remain intact or increase substantially.

References

Chow, K. Y., Dickson Ong, C. S., Tham, W. L., & Wong, Y. K. (2013). Factors influencing dining experience on customer satisfaction and revisit intention among undergraduates towards fast food restaurants. (Doctoral dissertation, UTAR).

Hinestroza, N. B., & James, P. T. (2014). The effects of sensory marketing on the implementation of fast food marketing campaigns. Journal of Management and Marketing Research, 14, 1.

Paul, R., & Roy, S. K. (2014). Case study 11: Marketing of services: The McDonald’s way. In Marketing Cases from Emerging Markets (pp. 99-112). Springer Berlin Heidelberg.