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Category: Business

Autor: chmehraj 21 August 2011

Words: 2957 | Pages: 12

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Executive Summary…………………………………………………………………………………………… 4

INTRODUCTION OF COMPANY………………………………………………………………………… 6

About McDonalds…………………………………………………………………………………. 6

Mission………………………………………………………………………………………………...... 6

STRATEGIC ANALYSIS………………………………………………………………………………………. 6

McDonald's in Pakistan………………………………………………………………………. 6

Lakson group of company……………………………………………………………………. 6

EXTERNAL SITUATION ANALYSIS……………………………………………………………………. 6

PEST ANALYSIS……………………………………………………………………………………… . 6-7

TREND AND IMPLICATION OF MCDONALDS:………………………………………………… 7

Competitors, customers, market analysis also KSF…………………………….. 7-8

INTERNAL SITUATION ANALYSIS:……………………………………………………………………. 9

Current strategy……………………………………………………………………………………… 9

Marketing mix (product, price, place, promotion)……………………………. 9-10

Performance analysis figure 2.1…………………………………………………………. 10

Determinant of McDonald's strategy options……………………………………… 11

SWOT ANALYSIS…………………………………………………………………………………………………. 12

Strengths & weakness…………………………………………………………………………….. 12-13

Opportunities & threats……………………………………………………………………….. 13

STRATEGIC DEVELOPMENT:……………………………………………………………………… 14

SUSTAINABLE COMPETITIVE ADVANTAGE:……………………………………………… 14

GENERIC STRATEGY:………………………………………………………………………………… 14

Cost leader ship and differentiation strategic………………………………… 14

MARKET GOAL AND OBJECTIVE:……………………………………………………………… 14

ANSOFF'S PRODUCT GROWTH MATRIX……………………………………………………. 15

TARGET MARKET………………………………………………………………………………………... 15

MCDONALDS MENU NAD PRICE LIST………………………………………………………… 16

CURRENT AND FUTURE POSITION……………………………………………………………… 16

MAP………………………………………………………………………………………………………………… 17

SUGGESTION AND RECOMMENDATION……………………………………………………… 17

Reference ………………………………………………………………………………………………………... 18

Executive Summary:

This report proposes to improve the sale of McDonald's Company. McDonald's is the leader in global fast food service retail. It has over 30,000 local restaurants that serve approximately 50 million people in more than 120 countries and territories every day. This report will tell us the current strategy of McDonald's in Pakistan whether strategy are internal or external, we talk about political, economic, social, and technology that how these effect on McDonald's market in Pakistan.

Later we will focus our discussion very important point (external analysis). External analysis we would focus on McDonald's customers, competitors, and market and key success factors. This report stresses the "four P's" of marketing (product, price, place and promotion) provide a good strategy implementation in the marketing function. The mix of these marketing elements would be appropriate. Promotion is more than advertising the location, size and nature of markets which the business strategy defines will guide Pricing is a complex issue because it is related to cost, volume because it is frequently used as a competitive weapon. Pricing policy changes are likely to provoke competitor response.

This report also urges the company make improvements on the current employment condition and practice in the company. The propose changes aim to create a more favorable working environment by providing the workers with benefits, The report also stresses out the importance of creating well-organized unions that will represent the workers and protect their rights and interests. The report encourages the use of collective bargaining locally to solve high cost problems.

The reports focus efficient marketing as well as lack of strategies in answering needs and demands of customers and expand/open more outlets in other cities of Pakistan. Employee are the key of good/success business because educated and expert staff can work efficiently so I focus McDonald's should hired staff on the basis of their personality traits i.e., education, family, social class, style, experience etc. and fired or trained due to not impressive character traits i.e., dishonest, cheater, untruthful, corrupt, etc.

At the end I recommended and suggest some important my point of view such as One female manager must be in every branch, Selection process should be clear and transparent, There should be more than one feedback session for improvement of performance of employees, Offer buffet dinner and lunch as well for SCA etc.

ABOUT MCDONALDS!

McDonalds formed in 1954; McDonalds brand is the leading global food service retailer with more than 30000 local restaurants serving nearly 50 million people in more than 120 countries each day. Serving more than 58 million customers daily. (business research 2008)

MISSION:

McDonalds mission is to be our customers favorite place and way to eat with inspired people who delight each customer with unmated quality, service, cleanliness and value every time.

STRATEGIC ANALYSIS:

MCDONALDS IN PAKISTAN:

McDonalds Pakistan opened its doors in September 1998 at Lahore and presently operating in seven major cities with a network of 24 restaurants. With a strong belief in the ray crock phrase McDonalds Pakistan has an aggressive plan to expand in all other cities of Pakistan and is rapidly growing with the focus to provide friendly and quick service restaurant experience to our customers.

LAKSON GROUP OF COMPANIES:

McDonalds Pakistan is a part of the lakson group of companies, the corporate strategy of lakson is unrelated diversification because lakson group also owned lakson tobacco co., Colgate Pakistan Ltd., century insurance Ltd, Express Newspaper, cyber net and various other businesses. But at the product and service that I discuss above are most popular and strong in Pakistan.

EXTERNAL SITUATION ANALYSIS:

PEST ANALYSIS:

POLITICAL ENVIRONMENT:

In general term the government policies do not affect the company much nor do the changes in the government influence the organization of the company. Mostly what company obligation to the government is the paying of different taxes which include payroll taxes and business taxes McDonalds enjoy an added advantage in Pakistan where customer protection law are not very strong.

ECONOMICAL ENVIRONMENT:

In Pakistan McDonalds offer the food at higher rates in comparison to local food restaurants. Mostly of the people in Pakistan fall in the category of middle class and it's not affordable for them to have McDonalds at regular basis.

SOCIAL ENVIRONMENT:

As McDonalds offer hilal food majorly in Pakistan so there are no religious, ethical and cultural issues associated with the operation. But sometimes the fact that many times anti Americans feelings rising for different reason may a lot or a little affect the company by boycotting Americans goods.

TECHNOLOGICAL ENVIRONMENT:

The continuous development in technology sector needs McDonalds to be updated regularly but as in Pakistan food making technology is still in the development.

TRENDS AND IMPLICATIONS OF MCDONALDS IN PAKISTAN:

There are many variations observed in the demand trends for McDonalds in Pakistan.

 High income group is relatively stable and they comprise a very small percentage.

 Pakistani peoples mostly perceived McDonalds on some occasion, visited while traveling or once in a while ( due to low income)

 Normally college, university students, working individual, kids and family's fond of spending a lot on fast food restaurants.

COMPETITOR ANALYSIS:

The competitors of McDonalds in Pakistan are Pizza Hut, KFC, Subway etc. all are direct competitor of it as compared to McDonalds Pizza Hut restaurants had virtually no lunch time sales and neither and competitive advantage while KFC is familiar with the Logistical and quality problems which accompany operating an international food operation.

The subway and Spice up stores couldn't be compared with KFC, Pizza Hut, the store are small and suffocating and don't even provide necessary privacy to the people eating in Pakistan.

MARKET ANALYSIS:

McDonald's high market growth and high market share in the Pakistan market compared to its competitors. On the other hand KFC and Pizza Hut are second in fast food during past some years KFC and Pizza Hut have lost their market growth because they lost their standard war to their competitors.

Spice up and Subway is also a direct competitor of McDonalds but marketing growth of it is very low. Also one of the import reasons of Subway and Spice up low growth is that they only focusing at the major cities like Lahore, Karachi and Islamabad (capital of Pakistan). Below you can see on vertical axis "Market share and Horizontal axis Market growth"

MCDONALDS AND IT COMPETITORS POSTION IN PAKISTAN MARKET:

HIGH

LOW

HIGH LOW (FIGURE 1)

CUSTOMER ANALYSIS:

In Pakistan the biggest activities customers are students worker if we talk according to demographic s McDonalds focused on 16-24 years male and female, single are heavy users. I used a word "single" it mean married/couple are not used to fast food in daily routine they mostly prefer " local/trandional" restaurants and Hotel.

KEY SUCCESS FACTORS:

There are many KSF due to which McDonalds is successful in Pakistani market.

 As we know that McDonalds in Pakistan owned by lakson group that is biggest corporation, their management allows not only standardization of quality but a more uniform and effective marketing strategies in order to sustain in the market.

 Many McDonald's restaurants have included a playground for children and advertising geared toward children.

 McDonalds does not offer just burgers their well-diversified menu is also one of the KFS as it competitor is quite specialized KFC in chicken, Pizza Hut in pizza etc.

 In "Ramadan month" McDonalds offer affordable deals that beat all others when it comes to prices.

 Another advantage that McDonalds has on its competitors is the location of its franchises its main advantage is that its located in vicinity that is easily approachable secondly it has got in its surrounding other very attractive place to be visited by people who want to enjoy their life to the full.

INTERNAL SITUATION ANALYSIS:

CURRENT STRATEGY:

The current strategy of McDonalds is to protecting long term brand reputation in Pakistan McDonalds has continually adapted to the customers taste, value system, life stage, language and perception. Also main target segment are children, youth college and universities students and urban family because they are mostly high class or we can say well-earned families. To attract student McDonalds provide internet facilities every outlet.

MARKETING MIX:

PRODUCT:

McDonald's Pakistan offers the standard range of items plus several other regional offerings similar to those available in Middle Eastern and South Asian outlets. The Arabia and the Spicy Chicken Burger are very popular. A chicken version of the Big Mac is also sold. As in many Middle Eastern restaurants, all food is served Halal. Let see in FIGURE 1.1 about different product consumption.

PRICE:

Due to external factors such as recession/increase competition force companies to provide "value" product and services to retain sales McDonalds always offer some sort of promotion pricing in Pakistan value McDonalds fall into the category of Pakistan line price. The price list will show down in FIGURE 6.1

PLACE:

In Pakistan total 24 fast food outlets of McDonalds they are all located in famous areas so far McDonalds is only in Karachi, Hyderabad, Lahore, Faisalabad, Rawalpindi, islamabad.in future very soon planning to expand in other area of Pakistan.

FIGURE 1.1

PROMOTION:

To attract family McDonalds campaign "I love" to promote the McDonalds target teenagers, the right message has to be communicated to the right audience through the right media. "To promote McDonalds put some special offer just for 2-3 month and then put back" (BOB O'SHEA VIEW).

PERFORMANCE ANALYSIS:

FIGURE 2.1

DETERMINANTS OF MCDONALDS STRATEGIC OPTIONS:

FIGURE 3.1

In figure 3.1 we determinate the McDonalds strategy option and choice, where we discuss about the current strategy of McDonalds that is protecting long term brand reputation and add value for customers but the one of the most strategy problem that I could find McDonalds only focus urban area high families and forget the middle and low class families, not providing value for low and middle families as well.

One of the Firm constraints is not well organized union to protect the worker right that why worker could performance well, mostly worker are selected without any training, due to working under lakson group management McDonalds is financially strong, and McDonalds is well known brand and also having loyal customer.

SWOT ANALYSIS:

FIGURE 4.1

STRENGTH:

McDonalds has high brand name in the world due to big chain of restaurants it brand name is very powerful. In Pakistan McDonalds is not opening outlet which are not secured. In Pakistan the loyalty of people are greater with the McDonalds because of its quality food and better place for families, McDonalds specially deals to its clients with up size meal who are the user of ward and Ufone telecommunication.

WEAKNESS:

McDonalds has not high educated professionals because of high illiteracy rate 65% only literate (economic survey 2008). People of Pakistan prefer having a low price meal while the menu of McDonalds is very costly every product .People in Pakistan are becoming quite health conscious, Fast food restaurants are giving rise to problems related to heart and others such as obesity and excessive cholesterol that are making people very conscious. Therefore it has been observed that to avoid such problems people have changed their eating patterns and are spending less on fast food such as McDonald's. McDonalds need to spend some money on advertisement and offer quality products to attract more and more customers.

OPPORTUNITIES:

In Pakistan the franchises are in only seven major cities and total outlet are 24. McDonalds could take advantage of large population and gain large customer market whole in Pakistan by offering some of product at low price if it could not relief all items. For college and university students provide internet facilities in café bar.

THREATS:

Political instability also poses threat for McDonalds it facing some hurdles in Pakistan due to current war on terror, sometime peoples argue that McDonalds use South African beef which has had many cases of mad cow disease.

STRATEGY DEVELOPMENT:

SUSTAINABLE COMPETITIVE ADVANTAGE

McDonald's core competency is providing convenience when people need and want to eat fast food at prices that are competitive and provide best value for the customer's money. One of McDonald's competitive advantages is its focus on consistency of quality, product of food and use of raw materials all around the world. The world recognition association with the brand McDonalds itself is also one of McDonalds competitive advantage.

GENERIC STRATEGY (COST LEADERSHIP AND DIFFERENTIATION):

COSTLEADERSHIP STRATEGY:

The high cost is barriers for McDonald's sale, the company could cut down the price by using local best quality products instead of import from others nations, and then McDonald's can target middle and lower class buyer rather than high class families. Low price rate defend long term profit against substitutes also McDonald's could compete better price with it rivalry.

DIFFERENTIATION STRATEGY:

McDonald's create their product by respecting and evaluating peoples some prefer healthy food and some are on diet and prefer just low calories food. By applying differentiation strategy McDonald's is serving as fast food but generate customers value by offering some special traditional dishes such as "chicken, mutton and beef roust and handy" it would be different for competitors to copy because they don't have much space in their outlet/branches while McDonald's has great space in it branches and at good location. People wish to enjoy traditional food in local restaurants after this McDonald's strategy they might be enjoy local quality food at McDonald's place with family.

The feature of this will increase process of buying, unique and value for customers using these new products, almost all customers will support this new and different step by McDonald's.

MOST APPROPRIATE STRATEGY AND MARKETING GOALS:

Most appropriate strategic is cost we can say low cost could work as leader in different McDonald's market, the company resource allow to do this strategy, McDonald's operating management can costly provide raw material locally then could able to sale product low price.

By implementing this cost strategy McDonald's is achieving its objectives/goals it's earn profit every class of customer are satisfying and the services offered to customer sharing a revenue growth of the country. So it could helpful to make further plan, strategies, making strengths expansion of franchises etc., as customers become attractive therefore McDonald's open new branches so it help in expansion of business .

ANSOFF'S PRODUCT-GROWTH MATRIX STRATEGY:

PRESENT

NEW MARKET

PRESENT NEW PRODUCT FIGURE 5.1

According to Ansoff's product and growth matrix strategy, above you can see the figure 5.1 in which we discuss present and new markets also discuss present and new product of McDonalds. In Pakistan McDonald's serving in seven big cities and offering different product menu that I will show you in figure 6.1 with price list. If we talk about new product in same market then company can innovate it product such as adding new vegetarian burger, green tea, black tea etc. also focus same present product in different markets such as cities along with the GT road etc. and motorway service area. For diversification of new product and markets some local dishes like more familiar in peoples and open outlet in factory area but here is little bit risky because labors don't like such kind of McDonalds burgers after working they want heavy food that would satisfied them so they could work more after eating. And in local hotel they eat well minimum RS40 (Pakistan currency rupee in short RS) while the minimum of McDonald's burger or new product is RS 280-300, McDonald's cannot decrease it image in market by offer too low cost while it expenses is too high.

TARGET MARKET:

To expand business McDonalds makes five years plan like opening new branches and different cities also makes plan on marketing mix. McDonald's can target market by opening outlet in rural area cities such as Sialkot, Chakwal; Thohabadur etc. these cities are along the main Punjab province GT road where 80% of Punjab traffic daily move here and there. Mostly travels wish to eat during journey fast food in order to save time, they might also be target.

MCDONALDS MENU IN PAKISTAN WITH PRICE LIST:

VALUE MEALS LARGE/SMALL MEALS/BEVERAGE LARGE/SMALL

Filet-o-fish meal 355/325 Beef burger 180

Mc Nuggets chicken piece 400/375 Mc flurry 150

Chicken big Mac 400/350 2 cheese Burger 400/375

Mc Arabia Meal 420/395 Mc royal meal 420/395

Spicy Mc crispy 410/385 Mc fries 160

Big mac 400/375 Coke, Fanta, Sprite (glass) 85

Chess Meal 355/330 Coffee 180

(FIGURE 6.1)

Above I add some of most important food menu that peoples want also add related price of product remember all price is refer of Pakistan currency rupee. Know we can judge how much expensive it most consumption product. Also keep in mind the daily wage of lower class of Pakistani people are normally RS 350-500. Then how it possible to spent more than half wage on one time meal so difficult I think know would do that ….

MCDONALDS POSTIONS IN PAKISTAN MARKET:

CURRENT POSITION: AFTER ADOPTING NEW STRATEGY:

OPPURTUNITIES IN PUNJAB CITIES THAT ARE CLOSE TO RURAL AREAS:

in above map figure we can see Punjab province 65% of population lives in this province and 80% of people travel daily through these road where I add McDonald's pictures these cities are attached with different rural area, too many potential customers are waiting for such kind of fast food restaurants and McDonald's can fulfill their demand and wants.

SUGGESTIONS AND RECOMENDATIONS:

 One female manager must be in every branch.

 Recruitment must be conducted for higher posts.

 Selection process should be clear and transparent.

 There should be more than one feedback session for improvement of performance of employees.

 Offer buffet dinner and lunch as well for SCA.

 Provide layout for meeting/decisions and children party

COMPLETE REFERENCE:

 Strategy marketing management edition-7 by David A.Aaker.

 Principal of marketing edition-13 by Philip kotler and Gray Armstrong (second chapter)

 http://EzineArticles.com/687438

 http://ivythesis.typepad.com/term_paper_topics/2009/02/mcdonalds-strategic-business-analysis.html#ixzz1I9oGLiE0

 http://en.wikipedia.org/wiki/McDonald's_products_(international)

 http://en.wikipedia.org/wiki/Lakson_Group

 http://www.pizzahut.net.pk/

 http://www.kfcpakistan.com/

 http://www.tohfay.com/send-fast-food-Deals-to-Pakistan_310-379.html

 http://www.google.com.hk/images?hl=en&gbv=2&q=mcdonalds%20pakistan&um=1&ie=UTF-8&source=og&sa=N&tab=wi&biw=1329&bih=442

 http://enhttp://world.subway.com/Countries/frmMainPage.aspx?CC=PAK.wikipedia.org/wiki/List_of_fast_food_restaurants

 http://www.kwintessential.co.uk/resources/global-etiquette/pakistan.html

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