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Global Marketing project

Comparison
of Fast Food
Restaurants
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Global Marketing project

Project by: Sir Shujja

Prepared by:

Umar yasin
Rehaan Athar
Arooj Riaz
Hina Nawaz
Ammara Mubashar

Submitted on: 5th July 2009

Pmas-University of Arid Agriculture


Rawalpindi.

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McDonalds

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COMPANY DESCRIPTION .
Established in California during the 1940s by two brothers,
the McDonald’s restaurant became a popular teen hangout
in the first flush of post-war affluence. To feed these youthful
bodies, the brothers reduced the menu to the perennial favorites –
hamburgers, applied assembly line techniques to food production and
expanded to four restaurants by 1953.
Taking note of the brothers’ success, in 1955, Entrepreneur Ray Kroc
bought the right to franchise the McDonald’s System. Renamed the
McDonald’s Corporation in 1960, Kroc focused his marketing effort on
the family meal and children, spending heavily on television
advertising which promoted the smiling clown face of its child-friendly
brand mascot, Ronald McDonald. Today, the McDonald’s franchise
exceeds 30,000 restaurants globally and serves over 50 million
people in more than 121 countries each day.

GOALS AND OBJECTIVES .


1. McDonald’s vision is to be the world’s best quick service
restaurants experience.
2. McDonalds is committed to maintaining and developing the best
food products in the quick service restaurant market.
3. In order to deliver this, the company has made a number of
commitments to food safety and nutrition.
4. Lead the Quick Service Restaurant market by a program of site
development and profitable restaurant openings, and by attracting
new customers. Increasing sales through promotions will enable them
to continue their program of expansion.

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5. McDonalds have an objective to continual enhance and improve


their menu. This will better satisfy their customers and give customers
more reason to visit. Many ideas for new items on the menu come
from the franchisees responding to customer demand.

6. Consumer tastes change over time and McDonalds has to respond


to these changes.

MISSION STATEMENT .
"McDonald's vision 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 restaurant smile."

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,
production of food and use of raw materials all around the world. The
world recognition associated with the brand McDonald’s itself is also
one of McDonald’s competitive advantages.

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Demand Trends .

There are many variations observed in the demand trends for


McDonald’s in Pakistan. The trend followed by the high income group
is relatively stable and they comprise a very small percentage. The
changes in the economy have very little effect on the demand trends
of McDonald’s that is being followed by this high income group.
Other reasons for these variations are:

McDonald’s is a brand that is mostly perceived by an average


Pakistani customer to be a place which is visited on some occasion
or once in a while. The main reason for this is the low disposable
income that people have because of the inflation and some other
unemployment reasons.

On the other hand McDonald’s lovers such as college students,


working individuals, kids and families fond of spending a lot on fast
food restaurants make it a place to be visited very frequently. One of
the reasons is high disposable income by blue collar individuals.
Another reason is the attraction for McDonald’s by kids as well as
those who love it for every reason.

There are also global issues which affect food demand for
McDonald’s e.g. bird flu and cow diseases in western countries
brought down demand for McDonald’s some years ago as it was a
known fact that they get their meat from international suppliers in
order to maintain quality.

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Key Success Factors :


McDonald's Pakistan has an aggressive plan to expand in all other
cities of Pakistan and is rapidly growing with the focus to provide
friendly and a quick service restaurant experience to its customers.
There are many key success factors due to which McDonalds is
successful in the market. We have been successful in identifying a
few:
All the franchises of McDonalds in Pakistan are owned by Lakson
Group of Companies. Apart from the fact that LGC is one of
Pakistan’s biggest corporations, their management allows not only
standardization of quality but a more uniform and effective marketing
strategies in order to sustain in the market.
Therefore McDonald’s being its part had to continue to strive to
maintain its standards in the local region.
Many McDonald's restaurants have included a playground for
children and advertising geared toward children, and some have
been redesigned in a more 'natural' style, with a particular emphasis
on comfort: introducing lounge areas and fireplaces, and eliminating
hard plastic chairs and tables. This has given a new outlook to the
McDonald’s as a quick service restaurant that is still not be seen on
other fast food restaurants.
McDonalds doesn’t offer just burgers. Their well diversified menu is
also one of the key success factors as most of McDonald’s
competitors are quite specialized: KFC in chicken, Pizza Hut in pizzas
etc. When it comes to eating out during Ramadan in any fast food
restaurant, the name that clicks to the customers is McDonald’s. The
reason is the affordable deals that they offer, that seem to beat all
others when it comes to prices. Another advantage that McDonald’s
has on its competitors is the location of its franchises.

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Its main advantage is that it is located in vicinity that is easily


approachable. Secondly it has got in its surroundings other very
attractive places to be visited by people who want to enjoy their life to
the full. These places are a source of attraction not for the services
they provide but for McDonald’s as well. For example one of its
outlets has been opened in Park Towers in Karachi so as to attract
the shoppers who visit it very frequently. Another strategic location
that McDonald’s has acquired is at the Clifton beach. This has forced
many others nearby restaurants and one of the very famous cuisine
restaurants with the name of Kublai Khan to get closed. Same is the
case in Rawalpindi/Islamabad where McDonald’s holds an important
strategic location. The customers that are driven to the Cinepax are
automatically attracted towards McDonald’s.

Product life Cycle Analysis :

In the Pakistani market McDonald’s has been placed in the growth


phase as it is still growing and has the potential to grow further. There
are many strategies that have been employed in the other countries
but are still to be made a part of the McDonald’s franchises in

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Pakistan. Following are some of the strategies that can be made a


part of the Pakistani market so as to increase its market growth:

a) McDonald’s in Pakistan can introduce breakfast in its menu to


cater to the needs of those who are in a hurry to get to office in time.
This will give them an edge on its competitors and its growth will
increase.
b) To gain advantage in the local market, McDonald’s should
introduce coffee at all the franchises.
c) To maintain its brand image as a twenty four seven customer
restaurant, McDonald’s must make its timings more flexible to the
needs of those who are usually very busy with their work schedules.

BCG Matrix :

According to BCG Matrix McDonald’s is a star. The reason for this is


its high market growth and high market share in the Pakistani market.
On the other hand KFC and Pizza Hut are the cash cows because of

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their low growth rate and high market share. During past some years
KFC and Pizza Hut have lost their market growth because of the fact
that they lost their standard war to their competitor i-e McDonald’s.
Another direct competitor of McDonald’s is AFC. According to BCG
Matrix it is question mark. Some of the reasons that are responsible
for its low market share and low market growth are the less
expansion strategies being followed by the company. Secondly they
are not focusing at all on all the major cities, rather they are only
focused on the target segments of large cities.

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SWOT ANALYSIS .

Strengths:
McDonalds has been able to maintain its market share in the
QSR market of Pakistan since 1998 and this is actually the major strength of
McDonalds that has made it so popular. Other major strengths are listed below:

Products:
A major strength is the various deals that McDonalds offers so that it could be
made affordable. Recently McDonalds offered a deal for Rs.85 only, containing a
beef burger along with a drink. McDonald’s offers many flavors of Mcflurry ice
cream from a mix of M&Ms to Oreo cookies. The M&Ms flavor was introduced
about a year back and is still popular among the M&Ms lovers. McDonald’s has
also customized its meal according to the tastes of Pakistan. People in Pakistan
do not eat bacon so McDonalds does not offer such sort of meals in the country.

Brand Recognition:
McDonalds has gained recognition worldwide. The chain is present all over the
world in more than 122 countries. In Pakistan a large number of franchises are
present, majority of them in Karachi and Lahore and McDonald’s is regarded as a
symbol of value and quality for your money.

Party celebrations:
McDonald’s offers its clients, especially children to celebrate their birthdays
there. One can invite friends, they decorate the party area, various party games
are organized along with face painting activity etc. Children are provided with an
opportunity to celebrate their day in the way that they want.

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Partnership with Coca Cola:


McDonalds and Coca Cola are official global partners. Coca cola is a big brand
name serving people all over the world with beverages.

Partnership with telecom companies:


McDonalds offered special deals to its clients with up size meals who are the
users of a particular company such as Warid and Ufone.

Weaknesses

Product Variety:
McDonalds needs to develop more and more products to stay in the competition.
After the opening of international QSRs in Pakistan, many local QSRs have also
been opened in various cities. The tastes are a bit different but they too are
offering chicken and cheese burgers, drinks and fries at competitive prices. This
situation requires McDonald’s to be more innovative and price competitive.

More advertising:
In Pakistan, McDonald’s rarely advertises at TV, however billboards often show
off juicy McDonald’s burgers but this could affect its popularity in future. It
definitely needs to advertise more to reach the target and the potential
customers.

Drive-Thru:
The service at McDonald’s drive-thru has been subject to criticism all over the
world and a lot of people complaint that the orders are either missing some of the
items or are entirely wrong. The service time at the drive- thru is also subject to
great variations and needs to be improved.

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Opportunities

Reasonable Prices:
McDonalds can broaden its market by offering meals at more competitive prices
in comparison to other local QSRs such as AFC, Pappasallis etc. This way it
could get hold of the potential customers too.

Opportunity to be innovative:
McDonalds could make itself more innovative by offering deals that appeal more
to Pakistani consumer’s e-g it can introduce desi flavors in the present products
such as Barbeque, Tandoori, Masala and other spicy tastes which are staple of
the country.

Breakfast and special noon meals:


Now in Pakistan most the trend of women going to work and opting for profession
is increasing as a result of which they are running short of time to carry out all the
home chores along with their work. McDonalds can offer deals to such market by
catering them in the morning for breakfast. During the office hours people mostly
go out for their lunch to restaurants. McDonalds can avail this potential market
too.

Growing dinning out Market:


In Pakistan the dining out trend is increasing especially in youngsters and upper
middle class. McDonalds has the opportunity to grasp this market quite well. It is
already doing well by serving them but it could arrange various activities for the
people of this age.

Dine in Cafes:
McDonalds can open up with small-sized cafes for the teenagers in their
universities and colleges.

McCafe’s:
McDonalds has opened coffee shops by the name of McCafe’s in UK. Pakistan
can serve as a new potential market for these cafes.

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Threats:

More health conscious customers:


With increasing awareness about food and the importance of a balanced diet,
people are opting for low calorie food e-g salads and food with high fiber content.
To remain in the scope, McDonalds needs to serve this market as well as the
present customers, this could be posed as a threat to McDonalds. Subway is
offering its low fat veggie and chicken sandwiches at prices almost the same as
McDonalds. For McDonalds diet meals could be a way out of this situation. Until
now, McDonald’s in Pakistan has nothing to offer to health conscious customers.

Foreign as well as local competitors:


In the growing market QSR market of Pakistan McDonalds competitors are
entering not only from other countries but from within the country too. Their
competitive prices could be a reason due to which McDonalds can lose its share
in the Pakistani market.

Changing customer styles:


Pakistani culture has been changing for years now with new technologies and
trends. People who are not brand loyal move with the changing times. Some
competitor can easily enter into the market and make better offers to its
consumers by focusing on their needs and the satisfaction that they want. To
remain competitive, McDonalds needs to be innovative and should change along
with the Pakistani consumer styles.

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Al.Najam Fried Chicken

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INTRODUCTION .

The time was mid 90's. Fast food companies were booming
in Pakistan. Quality fast food in Pakistan was outrageously
expensive and on a handful of families could afford to go there. No
middle class family could think of taking their children to such big
food chains. This was the time when AFCTm (Al-Najam Fried
Chicken) opened its first restaurant at Saman Abad, Main Market
in Lahore. Our goal and aim was very simple. To make the quality
fast food available to all those people who liked the fast food but
couldn't dare to afford.
We did so without compromising the highest standards of
food industry. We AFCTm , not only use the best raw materials
available but we also provide the best of food at a very reasonable
and competitive price. All our foods are processed and prepared
using of the art machines and equipments.
Alhamdulillah, with the grace of Allah Almighty, public
response was overwhelming. AFCTm became the fastest growing
fast food chain in Pakistan. At present time, AFCTm has more then
twenty branches Nationwide including Mall Road, Railway
Station, Allama Iqbal Town, Twonship,Mughal Pura, Defence,
Thokar Niaz Baig, G.T Road, Wapda Town. It has also opened in
Faisalabad , SGD, Abbotabad, Karachi, Gujranwala, Rawalpindi,
Gujrat.
Sahiwal Branch is ready to start business. At least three more
branches including Murree and Multan are in the wings.

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At AFCTm , we work hard and work right. Our work force


consist of very talented and experienced personnel. These workers
and team members are skillfully trained to follow all hygienic
procedures. Our disciplined staff is taught to respect its customers
and to provide the fastest services. We are proud that we use
frozen chicken, which is hygienic, healthy and safe.
We ensure our patrons the freshness of food all the time
every time when visit an AFCTm.

MISSION AND VISION .


AFC better for people by ensuring healthy foods

CORE VALUES .

TEAM WORK:
We share responsibility and ownership of our
decisions and action and trust one another in making shared
decisions as a fear thought honest and open
communication.

EXCELLENCE:
We provide the highest standards of quality in
everything we offer.

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INTEGRITY:
We insist on an organizational environment
consistently based upon the highest ethical standards.

RESPECT:
we will show application and high regard for our
associates partners and customers.
AFC BRANCHES .

Lahore(Head Office)
Faisalabad
Gujrat
Rawalpindi
Murree
Abbotabad
Sargodha
Sahiwal
Gujranwala
Karachi

Multan

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HIERARCHY .

Chairman

Trade Trade
Mark Mark
Owner Owner

Finance Marketing H.R Branch


Manager Manager Manager Manager

Assistant
Branch
Manager

Low Level
Employees

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SERVICES .

Dine in.
Take away.
Free home delivery.
Free Regular Drinks.

Dine In:
Dine in is the service provided by AFC. The customer
who wants to enjoy their offered products in AFC they use
to sit and enjoy the meal and exchange their ideas in AFC.
This service gives opportunity to the customer to observe
the environment and diversify their selves according to the
environment. Like other fast foods AFC provide self
service. Sitting arrangement is about 65 people. About 15
tables are available.

Take away:
This service is also offered by AFC to those customers
who have less time. These customers utilize the service by
taking the meal with them like parties and trips etc. very
busy persons who don’t have time to spent on AFC they
take meal with them so they use their time properly on their
work.

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Free Home Delivery:


Free home delivery service is also provided by AFC.
They received orders of customers on telephone and deliver
the meal to the customer free of delivery cost. This service
is to facilitate those customers who are not able to visit
AFC personally due to many reasons. This facility is
particularly to facilitate children and females. So this
service gives opportunity to fulfill their hearted desires for
AFC meal which always remain alive in their memories.

Free Regular Drinks:


If cashier fails to give you receipt you are entitled to a
free regular drink.

CHARITY PROGRAMS .

We have started a "Madrissa, Mosque and a Hospital"


at "Multan Road Phool Nagar" where there is no proper
arrangement of medicine, hospital and clinics people have
to go to other cities for treatments and many of them
expires in the way so we started the Free Hospital to help
those people.

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Hospital:
Round the clock active care
Patients are frequently and timely visited throughout
the day by the medical staff, and through the night too if
needed.

Hospital management The staff works by a system which


has been by professionals to prevent error and provide the
best of care and satisfaction possible. We try harder every
day, and every small incident of mismanagement is taken
seriously. The smallest of complaints are also taken care of
with top priority. Our aim is that each patient should be
catered to like a family member and not taken as a routine
client.

Night Duty The night staff is not allowed to sleep and is


compensated for the full 12 hours of the duty.
The medical staff is highly paid to provide them an
incentive to stay at Hospital. They are also given
bonuses based on their individual performances every
month.

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SWOT ANALYSIS .

AFC has the privilege of being the only fast food hotel
boasting of national quality standards until recently, till the
arrival of new fast foods in Pakistan. It has been exploiting
its strengths and opportunities quite efficiently and has
always tried to turn the weaknesses and opportunities in its
favor. An analysis of its strengths, weaknesses,
opportunities and threats as perceived by us is as follows:

Strengths:
o Convenient location.
o Hospitable treatment to customers
o High quality food.
o Low price food as compared to other fast
foods.

Weaknesses:
o Lower motivation
o Lack of training.
o Lack of performance oriented promotions.
o National level /Limited customers

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Opportunities:
o More incentives for outstanding staff to
retain them as it is difficult to find well
trained staff.
o Specialty restaurant should be introduced to
give a wider variety of services.

Threats:
o New restaurants in Islamabad providing
comfort to the people with a traditional
outlook.
o Fast foods like McDonald’s and KFC there
is lot of competition prevailing in market
regarding this business.

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Statistical Analysis .
We have distributed 150 questionnaires to the public among them
50 were being distributed in our institute while remaining 100 were
distributed in residential areas of Rawalpindi and Islamabad. The
result is a below along with graphs.

1. McDonald has more taste than AFC.


Strongly agree Neutral Disagree Strongly
agree Disagree
97% 2% 1% 0 0

97%

`
0%

Strongly agree 1% 2%
0%
agree
neutral
Disagree
Strongly Disagree

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2. McDonald has good quality food than AFC


Strongly agree Neutral Disagree Strongly
agree Disagree
98% 2% 0 0 0

98%

`
0%

Strongly agree 0% 2%
0%
agree
neutral
Disagree
Strongly Disagree

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3. McDonald has more meals than AFC according to customer


needs.

Strongly agree neutral Disagree Strongly


agree Disagree
99% 0 1% 0 0

99%

0% `
0%
0% Strongly agree
agree
1%
neutral
Disagree
Strongly Disagree

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4. McDonald company has attractive brand name than AFC

Strongly agree neutral Disagree Strongly


agree Disagree
96% 0 4% 0 0

96%

0%
`

0%0%
4%
Strongly agree
agree
neutral
Disagree
Strongly Disagree

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5. McDonald company charges reasonable prices than AFC.


Strongly agree neutral Disagree Strongly
agree Disagree
0 10% 0 80% 10%

10% 0% 10%
0%

Strongly agree
80%
agree
neutral
Disagree
Strongly Disagree

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6.McDonald company does not change the quality of product with


change in price as compared to AFC.
Strongly agree neutral Disagree Strongly
agree Disagree
92% 0 0 8% 0

92%

0%

0%
0% Strongly agree
agree
8%
neutral
Disagree
Strongly Disagree

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7. McDonald company provides more incentives and sponsorship


for customer than AFC
Strongly agree neutral Disagree Strongly
agree Disagree
0 30% 5% 65% 0

0%
0%
65%

`
30%

Strongly agree
5%
agree
neutral
Disagree
Strongly Disagree

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8. McDonald company has more sale discounts/sales offers as


compared to AFC.
Strongly agree neutral Disagree Strongly
agree Disagree
0 1% 8% 91% 0%

91%

1% 0%
0%
8% Strongly agree
agree
neutral
Disagree
Strongly Disagree

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9.McDonald company has more creative advertisement than AFC.


Strongly agree neutral Disagree Strongly
agree Disagree
94% 6% 0 0 0

94%

0% `

0% 6%
0%
Strongly agree
agree
neutral
Disagree
Strongly Disagree

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10.McDonald company advertises more on media than AFC.


Strongly agree neutral Disagree Strongly
agree Disagree
0 0 80% 20% 0

80%

0% `

0%
0%

20% Strongly agree


agree
neutral
Disagree
Strongly Disagree

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11. McDonald have more attractive packaging than AFC.


Strongly agree neutral Disagree Strongly
agree Disagree
90% 10% 0 0 0

90%

0% 0%

0%
10%
Strongly agree
agree
neutral
Disagree
Strongly Disagree

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12. McDonald company have more market share as compared to


AFC.
Strongly agree neutral Disagree Strongly
agree Disagree
70% 0 30% 0 0

70%

`
0%
0% 0%

30% Strongly agree


agree
neutral
Disagree
Strongly Disagree

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13. McDonald are easily available in market as compared to AFC.


Strongly agree neutral Disagree Strongly
agree Disagree
33% 67% 0 0 0

67%

0%

33% 0% 0%
Strongly agree
agree
neutral
Disagree
Strongly Disagree

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14. McDonald distributor’s work well as compared to AFC.


Strongly agree neutral Disagree Strongly
agree Disagree
95% 5% 0 0 0

95%

0%
`

0%

0%
Strongly agree 5%
agree
neutral
Disagree
Strongly Disagree

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15. Do you think AFC will be completely out of market in future?


Strongly agree neutral Disagree Strongly
agree Disagree
0 52% 8% 40% 0

8%

52% `

40%

0% 0%
Strongly agree
agree
neutral
Disagree
Strongly Disagree

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Analysis and Recommendations .

From the above survey conducted on two fast food


restaurants one of them was local and the other was
international, we have reached towards a conclusion that:

People mostly prefer international restaurants as it has


good quality food, friendly environment and
reasonable charges. From the above survey we do
identify that local fast food restaurant is far behind
than international, reason behind that it has low
quality food and short menu. Although it offers
relatively low prices and some discount offers but still
it hasn’t captured that market share as compare to
McDonald in Pakistan.

McDonalds has variety of meals as compared to Afc.


It provides large range of burgers, fries, international
meals salads and ice cream. On the other hand Afc has
limited variety of burgers and fries .According to our
survey, public want large variety of meals in every
restaurant therefore they prefer McDonald over Afc.

Customers usually prefer brand names when choosing


any restaurant therefore McDonalds is also enjoying
its high market share due to brand name in Pakistan.

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It is a very common practice that quality of product


diminish with a decrease in the price but according to
our survey 92% of the public confided that McDonald
has never compromised on their quality even though
when it has decreased its prices.

Our result shows that people are more satisfied with


the discounts and promotions offered by afc.

Another tool for capturing the market is “attractive


advertisements” and McDonalds is also given
preference by customers due to its advertisements as
compare to Afc.

McDonalds is easily available all over Pakistan. It has


opened numerous branches as compare to Afc. Afc
has limited no. of branches in Pakistan therefore easy
and quick access is also a major factor of preference of
McDonalds over Afc.

Afc is successfully fulfilling customer demand but it


cannot compete McDonalds therefore heavy
investment is still needed by Afc to stay in market
otherwise it might be out of market in near future.

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References

www.google.com
www.afc.com.pk
www.mcdonalds.com

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