I. EXECUTIVE SUMMARY
McDonald’s Philippines is a subsidiary of the Filipino-owned Golden Arches Development Corporation. The first Filipino McDonald’s to open for business was in the Morayta university districts in Manila during 1981. These days McDonald’s is operating over 150 restaurants throughout the islands of the Philippines. Being a 100% Filipino-owned franchise allows McDonald’s Philippines to be more agile and take quicker actions, making them an even more competitive force in the Filipino fast-food market.
It is one of the leading fast-food chains internationally as well as in the Philippines, with a rapidly developing consumer brand and growing customer base. . It is a place for family togetherness organized around a common love of the traditional food. Its operating system is characterized by focusing on uniformity for consistent quality, the formation of partner relationship with its franchises and supplier to improve operating system innovatively and last but not least the introduction of new products. With its steady drive for improvement and consistently high quality, McDonald’s revolutionized the entire supply chain. Instead of regimenting its supplier and franchisees, McDonald’s expected commitment from them in terms of adherence and experimentation.
The implemented, smooth operating chain of suppliers, McDonald’s corporate management and franchisees balances each other, creates an entrepreneurial spirit that added value, innovation, economics of scale, the bargaining power for advertising and purchasing, as well as new product and process ideas to the company. Additionally, all involved parties maintained a collective emphasis on disciplined quality standards. As years passed by, McDonald’s needed to adapt to industry changes by accomplishing some process design innovations in fruitful collaboration with its suppliers and franchisees.
In this context, McDonald’s improved the chain’s chicken and fries’ quality and consistency by switching from raw to frozen delivered fries as well as the productivity of employee. Another major process enhancement was the introduction of the breakfast at McDonald’s. In this way, the corporation expanded its operating hours since it had to pay for rent, utilities and insurance 24 hours a day, anyways. The generation of a totally new business came along with the nice side effect that it again distinguishes itself from its competitors.
This marketing plan is used in outlining the product, pricing, and distribution and promotion strategies to be implemented and executed during this time. It proposes a revitalization of the McDonald’s philosophy so as to focus on the quality of products and services for customer’s value and a healthy lifestyle, healthy eating habits, smart choices and education. The plan also outlines the structural issues that may arise during its implementation and execution, tactical initiatives to turn strategy into action.
Before, the company use grilled direct system. Which becomes the problem of the company because the customer always complaining about the quality of the product like chicken mcdo, when it is served to the customers it is not crispy because it stays longer in the warming bin, and also the patty of the burger, it is not juicy because it is not hot.
The access of McDelivery to the call center is another problem of McDonalds because some times the information about on the location of the customer is wrong.
Now a day the McDonald’s uses the Made for You (MFY) system. • Food is made or prepared to actual customer demand, providing each and every burger only when it is needed just in time (JIT). • It standardizes assembly of all sandwiches to one or two at a time.
• Requires minimal Human Decisions Making.
• It requires Behavioral change
❖ Complete waste
❖ Standard procedure
III. SITUATION ANALYSIS
• Goals – Develop a solution to improve kitchen layouts, people positioning and operational procedures for a better guest experience. In simple terms: our goal is to have a happy and satisfied customer.
• Focus – the company should focus on products and services.
McDonald’s is a customer-oriented company that strives to offer Filipinos a combination of great tasting, quality food productions at value prices with excellent service.
• Values – Customer – driven, Malasakit, Integrity, Teamwork and Excellent.
❖ Quality of the product, services and cleanliness of the store.
❖ The service of the company is fast and accurate, and we believe that taking good care of our customers is the first vital step toward effective sales building.
❖ Patents and Trademark
❖ Branding such as through the use of logos, colours, slogan and other images. A key part of the McDonald’s brand is its ‘M’ logo otherwise known as ‘The Golden Arches’.
❖ The competitors like Jollibee, Mang Inasal, Burger King etc.
❖ Lack of cooperation between the management and in the crews.
• Market Shares – McDonald’s has captured more than 40% share of the hamburger market in the Philippines.
• Number – 30% is ages 60 and above, 20% is ages 1-15, 50% is ages 16 and above. This is the percentage of customer who are eating at the McDonald’s everyday especially during breakfast, lunch, and dinner.
• Type – Class B & C
• Value Drivers – a part from our product and services. McDonald’s gives back to the community through the Ronald McDonald House Charities (RMHC). RMHC supports children’s development and well being through Bahay Bulilit and Bright Minds Read (BMR). Every happy meal purchase gives 50 centavos to RMHC. • Decision process – The customer have a lot of decision making it is base of what they needs and wants, also the customer decide to buy a discounted product like in coupon and the mcsaver meals.
• Market Position
No. 1 (Jollibee)
No. 2 (McDonald’s)
Raw materials are environment friendly
Jollibee has a poor service
• Market shares – Jollibee has captured more than 52% share of the hamburger market in the Philippines.
• Risk diversity
• Large market share
• Strong supply chain
• Promoting ethical conduct
• Competitive fast-food chain
• Attentive and friendly staff/crew’s
• Rigorous food safety standards
• Good reputation among customer
• Decentralized yet connected system
• Strong brand name, image and reputation
• Strong financial and performance and position
• Affordable prices and high quality products
• Nutritional information available on packaging
• Strong global presence and performance in the global marketplace • Specialized training for managers known as the Hamburger University
• McDonalds Plan to Win focuses on people, product, place, price and promotion
• Unhealthy food image
• High staff turnover including top management
• Customer losses due to fierce competition
• Lack of access to the best natural resources
• Lack of access to key distribution channel
• Growing health trends among consumers
• Joint ventures with retailers
• Consolidation of retailers likely, so better locations for franchisees • Respond to social changes by innovation with in healthier lifestyle foods • Strengthen its value proposition and offering, to encourage customers who visit coffee shops into McDonalds • The new “formats”, Mccafe, having wi-fi internet links should help in attracting segments. Also installing children’s play-parks and its focus on educating consumers about health, fitness. • International expansion into emerging market’s of other country • Growth of the fast-food industry
• Low cost menu that will attract the customers
• Providing many promotional activities
• Health professionals and consumer activists accuse McDonald’s of contributing to the country health issue of high cholesterol, heart attacks, diabetes, and obesity • McDonalds competitors threatened market share of the company both internationally and domestically • Global recession and fluctuating foreign currencies • Affordability of the competitors products
• Similar flavors and products of the competitors • Competitors endorsers are much popular when it compares to McDonalds
Market Segmentation is the process of splitting customer in to different groups, or segment within the customers with similar characteristics have similar needs.
Mcdonalds offered their services based on certain country basic food. Like Philippines McDonalds realized that Filipino basic food is rice which with fried chicken as its local basic food.
Demographic segmentation divided the market into groups based on variables like gender, age, nationality, religion; family life cycle and family size McDonald offered their services by segmented their customer base on age, religion and family life cycle. To offer the best service McDonalds still concern about variations due to differing tastes and cultural issues for their customer over the world.
Behavioral segmentation focuses on dividing consumer based on their knowledge, attitudes, uses, benefit sought, or responses to company’s product. One of the best forms of segmentation is to divide buyers according to the different benefits that they want to get by purchasing the product. Usually people who look for in their product class or look for each benefit. For example, McDonald provide McDelivery for 24 hours, this is the only one delivery service that not stop even once in a while a day by just call it and order, after that within a minute it comes to your place with the food that still hot and fresh.
V. Alternative Marketing Strategies
McDonalds has seen recent success through a careful implementation of its “Plan to Win” strategy, which focuses on several key aspects of the business, namely increasing traffic to restaurants, providing everyday value to customers, innovating the company through the creation of new menu items, re-imaging the company’s look, as well as its marketing campaigns.
McDonald’s Plan to Win is based on a core set of four main goals:
• Acquire more customers
• Get these customers to eat at McDonalds more often
• Develop more brand loyalty for the McDonalds brand
• Ultimately become more profitable
Increasing restaurant visits
Current market condition help the appearance of McDonalds as a low cost alternative to eating at more expensive restaurants in the minds of customers, which has consequently led to an increase in foot traffic at McDonalds franchises. McDonalds has addressed these conditions through an increase in advertising, specially displaying the company’s attention toward a diversified menu of low cost items. Such advertising serves to satisfy all four of goals of Plan to win program, drawing customer interest through a short display of the plethora of new menu options recently added, while also helping to change the look and feel of McDonalds in the minds of customers.
Providing everyday value
In order to create an overall feeling of value for customers to experience, McDonalds has released a modular value meal, where customers have the benefit of both low prices coupled with increased freedom when deciding on a meal. While traditional menu options emphasize a trade-off between ordering freedom and price, the McDonalds value menu provides customers with both all at once, helping customers associate the brand with good value.
Innovating new menu items
At the same time as their menu choices have become modular and less expensive, McDonalds is also creating value for customers by providing a diverse menu with many more ordering options. Customers can now expect an increase in health-conscious options by adding some vegetables in the burger and also they provide some dessert like apple pie or pineapple pie. McDonalds also provide a mccafe like ice mocha, ice latte, and cappuccino, Americano to provide some different variety of coffee to satisfy the customer.
As well as considering the important of keeping customers informed of the continuing changes to the company through advertising media and social media dialogues, McDonalds also recognizes the value of maintaining an ongoing support system and training structure for each of its franchise operators. As mentioned above, McDonalds uses well defined, and measurable milestones to help their constituents meet company goals with as few inconsistencies as possible. McDonalds’ training programs have been continuously recognized for their excellence, and with the continuing changes being carried out throughout the company, this attention to the value of training is a terrific asset to the company.
Re-imaging the restaurant
Directly benefiting the company’s goals of brand development for the company, McDonalds is reenergizing their brand through an understanding of “brand power”, which is built on the cultivation of four key areas of the brand, brand identity, familiarity, specialness, and authority.
Brand identity is defined as the set of characteristics that customers recognize your brand by; in McDonalds’ case these are speed, consistency, value, and variety. Brand identity works with brand familiarity, helping to expand the message that symbols of the company, or even the overall impact of advertisements themselves in reinforcing the identity of the brand in the minds of customers. If carefully managed, McDonalds can use their brand identity to make their investments in advertising go much further.
Beyond this, brand specialness and authority continue the process, representing the perceptions of McDonalds as the company appears to customers. Ideally, McDonalds should leverage brand specialness and authority to clearly stand out as a distinct and trustworthy source of value, allowing customers to increase the value of the McDonalds brand through their positive interactions with the company.
McDonald’s adopts different strategies to attract customers of different age groups, but still the main target remains to be children. So in order to attract them, McDonald’s use a key tool: the Happy Meals, which seem to fascinate children due to the toys included in the menu. In addition to this, they have a tie up with The Walt Disney Company for the Disney characters included in the menu, in order to make sure that they offer the kids a wide range of toy options. Moreover, McDonald’s provides the children with a special facility, unique for food venues and fast-food restaurants: a playground.
This strategy is aimed at making McDonald’s a pleasant and fun environment for both kids and parents. Even the exterior of every restaurant is also strategically designed using bright colors to invite in the customer, especially kids who can easily be influenced by these aspects. So not only that the children like it, it is a chance for the parents to spend some “quality time” with their kids. Another aspect of their marketing strategy is the fact that every McDonald’s restaurant provides Wi–Fi facilities, a detail that adds to the attractive qualities and is aimed at teenage customers.
In addition to this, what is representative for this chain is their clown mascot, Ronald McDonald, who is essential for creating the bond with children and entertaining them. They can even have private birthday parties in the facilities, again part of McDonald’s aim to induce happy memories in children’s minds, and to make them associate the McDonald’s brand and logo with happy moments.
VI. Selected Marketing Strategy
Suppliers are dedicated to providing McDonald’s with top quality material that is continually monitored for freshness and safety. McDonald’s uses regional suppliers to ensure that the freshness is delivered to customers in every product they buy. Food quality is keys at McDonald’s. They seek out fresh lettuce and tomatoes, onions and pickles, quality buns and potatoes, pure ground beef, select poultry and fish and wholesome dairy products. All of the beef, chicken and pork that are used are purchased from federally inspected facilities to ensure freshness, wholesomeness and peak quality when served to customers.
The chicken products are made from high quality boned rib and leg meat and are covered in a specially seasoned, lightly battered coating. They are shaped in uniform sizes to ensure consistency in weight and value.
The fish products in McDonald’s Filet –O- Fish are 100% pure whole white fillets that are lightly breaded.
Their exacting quality standards for fish surpass federal requirements. The ocean-fresh quality of Filet-O-Fish is a result of the process and ability to freeze the fish at sea to maintain freshness.
McDonald’s use freshly shredded lettuce, onions, pickles and tomatoes in their restaurants. All their vegetable products are processed from high quality graded vegetables in a 100% dedicated vegetarian plant.
McDonald’s French fries are famous around the world. To make French fries, McDonald’s uses only the best potatoes available from their own potato farms. Their potato suppliers make many of the same nationally recognized brands of potato products to make customers feel that they are with their family at home. These potatoes are cut, blanched and processed on state-of-the-art processing lines to ensure maximum retention of nutrients. Their French fries and Potato Wedges are cooked at the plant in 100% vegetables cooking oil.
Cheese and other Dairy Products
All dairy products like cheese, McShakes and Soft Serves are made from fresh dairy milk. All dairy products including cheese have a role to play in balanced diet because they contain a wide variety of essential nutrients such as protein, calcium, fat solubles, phosphorus, etc. McDonald’s uses a special blend of pasteurized American cheese to complement the flavor of their sandwiches.
McDonald’s uses buns made from locally grown wheat flour. They are baked locally and delivered fresh, several times each week to McDonald’s restaurants.
Food preparations are done in 100% refined vegetable oils at the restaurants plants. They use liquid oil and not hydrogenated oil. This means there are no TFAs or Trans Fatty Acids in the French Fries or any other products. Additionally, these vegetable oils contain some essential fatty acids necessary for growth.
Food quality is the crucial element at McDonald’s. Despite extensive and meticulous quality test at the suppliers end, all products are once again carefully scrutinized at the restaurant. Immaculate of quality allow for nothing but the best to reach customer’s tray.
Their products are sourced from the highest quality ingredients, prepared hygienically and treated to regular quality checks such as the McDonald’s Inspection Program (QIP).
Scope of Product Line
Place, as an element of the marketing mix, is not just about the physical location or distribution points for products. It encompasses the management of a range of processes involved in bringing products to the end consumer. McDonald’s outlets are very evenly spread throughout the cities making them very accessible. Drive in and drive through options make McDonald’s products further convenient to the consumers.
Distribution arrangements tend to be long term in nature. Because of this time horizon, channel decisions are usually classed as strategic, rather than tactical or operational ones. Many of McDonalds restaurants are open 24 hours per day which satisfies the customers needs and wants, especially for exists their hunger. This kind of distribution strategy is called “intensive distribution”, means marking the product available for sale through all possible channels of distribution. “Intensive distribution is stocking the product in as many outlets as possible.”
The promotions aspect of the marketing mix covers all types of marketing communications One of the methods employed is advertising, Advertising is conducted on TV, radio, in cinema, online, using poster sites and in the press for example in newspapers and magazines. Other promotional methods include sales promotions, point of sale display, merchandising, direct mail, loyalty schemes, door drops, etc. The skill in marketing communications is to develop a campaign which uses several of these methods in a way that provides the most effective results. For example, TV advertising makes people aware of a food item and press advertising provides more detail. This may be supported by in-store promotions to get people to try the product and a collectable promotional device to encourage them to keep on buying the item.
At McDonalds the prime focus is on targeting children. In happy meals too which are targeted at children small toys are given along with the meal. Apart from this, various schemes for winning prices by way of lucky draws and also scratch cards are given when an order is placed on the various mean combos.
Since the problem of McDonalds is about the customer that keeps on complaining for the quality and freshness of the products that is being served. Therefore I conclude that the company should use the MFY (Made for You) system, so that the food is made or prepared for the customer just in time with a good quality for a reasonable cost. The company should also provide a large number of riders to avoid late delivery.