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FAST FOOD RESTAURANT
CASE 06
MARKETING MANAGEMENT
GROUP 06
CONTENT
 INTRODUCTION
 SUBWAY : SUCCESS FACTOR OF SUBWAY
 MCDONALD’S
 HISTORY
 COMPETITOR
 7P OF MCDONALD’S
 NOWADAYS ISSUE
 RE-BRANDING : THE MCDONALD’S 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 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.
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
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.
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.
India
Thailand
Dubai
Indonesia
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.
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
afterYum! 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 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.”
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.
PRODUCT
 Hamburgers
 Various types of chicken sandwiches
 French fries
 Soft drinks
 Breakfast items
 Dessert
 Salads
 Vegetarian items
 Wraps
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”.
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
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”
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, McDonald’s 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 : McDonald’s 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: McDonald’s 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 McDonald’s :
 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.
Communicate
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, 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 theYear 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.
McDonald’s France
Beaugrenelle restaurant
in Paris with an array of
sustainability enhancements
and environmentallythemed
decor.
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
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.
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: 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.
We believe in the McDonald’s System
 The balance of interests among the three groups :
owner/operators, suppliers, and company employees.
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.
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
McDonald’s Champion
Kids programs
McDonald’s serves as the Official
Restaurant of the Olympic Games
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)
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
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