Analysis of McDonalds

MARKETING MANAGEMENT

(CZBK9001)

ANALYSIS OF McDonalds

Subject: Marketing Management

Course Code: CZBK9001

Prepared for: Sir Marius Louw

Prepared by: Daniyar Kurishbayev

Date of Submission: 29th October 2011

EXECUTIVE SUMMARY

Subway is positioned as a fast food chain that serves fresh food to it's target audience mainly comprises of young individuals focused towards healthy diet. Since, 1989, it is one of the fastest growing fast food chains in the world and takes credit of becoming a direct competitor for Pizza Hut, McDonalds, KFC, etc.

It's advertising slogan or most precisely put, it's tagline is, 'Eat Fresh' highlighting the actual positioning the business has maintained. Having served customers at an international level, Subway, aims at value being served rather than having a transactional relationship. Moreover, their sandwiches are served based on size mentioned on the menu and consumers can opt for a value addition through customization.

Below the line promotional strategies have been used and competitions have being devised based various games such as Scrabble. Similarly, both hard sell and soft sell approaches have been used to market the product.

Various strategies applied on the success of Subway but there are two strategies that are going to focus on such as: differentiation and positioning strategy, where differentiation is about the uniqueness of the product and positioning is more about how do you want people to see your brand and choose yours rather than other brand.

Subway really well known with these two strategies, so will the differentiation strategy will have more effects on the company like Subway or the positioning strategy? What are those strategies actually, why it could be that important? Everything will be exposed in details on the next part.

INTRODUCTION

It is no secret anymore that branding simply refers to the process of establish differences and emphasizing the benefits of the product and services. Generally a successful company applied strategies that related to Porter's competitive advantages either differentiation or cost-leadership or focus, but in this opportunity, "differentiation" strategy will be in the spot light and also, the partner of differentiation, which is "positioning". A company that considers specific elements of product differentiation and use them in positioning win in the market-suggests Kaizen consulting's Michael Walsh.

In purpose to have a better understanding of "differentiation and positioning", SUBWAY will be made as the example. So, the theories of differentiation and positioning will be synchronized with the well-known food brand "SUBWAY".

COMPANY'S BACKGROUND

McDonald's Corporation (McDonald's) is a foodservice retailer that is engaged in the franchising and operation of McDonald's restaurants. The restaurants are also operated by foreign affiliated markets, referred to as affiliates and developmental licensees under license agreements. The restaurants offer a substantially uniform menu, with a few geographic variations that include Big Mac, Quarter Pounder, Filet-O-Fish, Chicken McNuggets, Chicken Selects, McFlurry desserts, McCafé beverages, McGriddles and Egg McMuffin. The company has 32,478 local restaurants serving more than 60 million people in 117 countries each day. The key markets of the company include the US, France, Germany, Australia, China, Japan, Canada and the UK. McDonald's is headquartered at Illinois, the US.

LITERATURE REVIEW

Here, differentiation and positioning strategy will be ripped out in details theoretically.

First of all, "Differentiation", is one of strategies that developed by Michael Porter, where there should be cost-leadership, differentiation, and focus. Michael Porter believes that by adopting "differentiation" strategy then the company should have a competitive advantage than their competitors. So what is differentiation? Why this strategy could provide a competitive strategy? Differentiation strategy is a strategy that require development of a product/service that offer unique attributes that are valued by customers and because of the uniqueness of the product, it will make our product more special than competitors. This uniqueness tends to have a higher value either in terms of products, service, personnel, channel, and image than others.

There are five dimensions of differentiation strategy such as:

Product

Product differentiation is a common marketing objective used by companies to create a distinct offering to target customers. Product differentiation is "the differentiation of goods along key features and minor details" according to Valentino Piana of the Economics Web Institute.

In terms of product, of course it will be the unique one where it also going to be more expensive than normal one, for instance: if you buy a shirt from small shops in the road compare to well-know brand, it's the same product (shirt), but there are differences between those two shirt in terms of several aspects. These aspects that differentiating product are:

Quality

Features

Performance

Conformance

Durability

Reliability

Reparability

Style

Design

Pricing

Customization

Service

Service simple words that really play an important role in business world, why? Because, service quality had an impact on trust and relationship outcomes where trust was found to drive "service differentiation". So, when a company have a service differentiation, it will build trust then drove commitment which ultimately had an impact on both satisfaction and