1. FAST FOOD RESTAURANT CASE 06MARKETING MANAGEMENTGROUP 06

2. CONTENT INTRODUCTION SUBWAY : SUCCESS FACTOR OF SUBWAY MCDONALDS HISTORY COMPETITOR 7P OF MCDONALDS NOWADAYS ISSUE RE-BRANDING : THE MCDONALDS STRATEGY 3. INTRODUCTIONFast 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. 4. VARIANT OF FAST FOODFast food often brings to mind traditional Americanfast 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 5. WHY FAST FOOD RESTAURANTGROWS FASTLY? With todays hectic lifestyles, time-savingproducts are increasingly in demand. One of themost obvious examples is fast food. The fast food industry focuses heavily on rapidconsumer turnover, speed of service, take-outsales, and less expensive price compare to tableservice restaurant meals. 6. SUBWAY Subway is a fast food franchise that primarilysells submarine sandwiches, salads and personalpizzas. It is owned and operated by DoctorsAssociates, Inc. (DAI). Subway is one of the fastest growing franchisesin the world with approximately 31,835restaurants in 91 countries as of September2009.It is the largest single-brand restaurantchain globally and is the second largestrestaurant operator globally after Yum! Brands(35,000 locations). 7. SUCCESS FACTOR OFSUBWAY 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 8. McDonalds McDonalds Corporation, known as McD, startedit 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 worlds largest chain of fast-foodrestaurants with more than 31,000 localrestaurants serving more than 58 million people in118 countries each day. Low price, speed, service and cleanlinessbecame the critical success factor of thebussiness. 9. McDonaldsMcD 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 10. McDonaldsDespite 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 McDonalds the brand name that defined American fast food. 11. COMPETITOR Yum! the worlds 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 after Yum! Brands and McDonalds 12. How McD become a globalbrand By franchising, McD are able to expand rapidlyacross countries. Establish Hamburger University that only aim totrain franchisees and corporate decision-makers. 13. McD MISSIONMcD mission is to be the worlds 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. 14. 7P OF McD McDonalds overall strategic plan is called Plan to Win: created better McDonalds experiences through the execution of multiple initiatives surrounding the five factors of exceptional customer experiences product, price, place, promotion, people, physical evidence, process. 15. PRODUCT Hamburgers Various types of chicken sandwiches French fries Soft drinks Breakfast items Dessert Salads Vegetarian items Wraps 16. PRICE McDonalds has a unique pricing strategy thatfalls solely on their many product lines. The most notable and recent example of this isMcDonalds Dollar Menu. 17. PLACENumber of locations more than 31,000 worldwide.Type of restaurant : counter service drive-through service gas stations convenience stores shopping mall McStop 18. PROMOTION Happy mealsMcDonalds used to give children a choicebetween toys, milk, fruit, or vegetables as partof their Happy Meals. Slogan Im Lovin it 19. PEOPLE Stars as their performance Gives employee larger role in decision Philosophy of quality, service, cleanliness, andvalue is the guiding force behind its service Fast friendly service 20. PHYSICAL EVIDENCE Cleaness Speed Quality Transparency 21. PROCESS Food manufacturing transparent to the customers Training to the licenses Invented the most efficient cooking equipment New method of food packaging and distribution 22. FALLEN OF McD In 2002, McDonalds posted its first loss. Earningswere $893.5 million, down 45 per cent from $1.64billion in 2001. McDonalds share of fast-foodsales in the U.S. has slipped almost twopercentage points, to 16.2%. The drop has come even as the company hasincreased its number of restaurants by 50%, andthe Total revenue from 2001 to 2002 justincreased for 3.6%. 23. Table : McDonalds Revenue (dollars in millions) 2000 20012002Total Revenue 14,243 14,87015,406Operating Income3,3302,697 2,113Net Income1,9771,637893 Source: McDonalds 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% 24. What went wrong?The most fundamental problem the is the quality of itsfood. While the company focused on building morestores, consumers have decided they want better foodand more variety. 25. HEALTH ISSUE Obesity According to the Massachusetts Medical Society Committee onNutrition, fast food is especially high in fat content, and studieshave found associations between fast food intake and increasedbody mass index (BMI) and weight gain. Food poisoning Manure gets mixed with meat, contaminating it with salmonellaand Escherichia coli 0157:H7. E. coli 0157:H7 is one of the worstforms of food poisoning. Usually spread through undercookedhamburgers . 26. ENVIRONMENTAL ISSUEThe biggest environmental nightmare forMcDonalds : Waste Packaging Global warming 27. Obesity and Well being issue There is increasing concern about obesity rates and related risks to well-being, and a holistic approach by McDonald 28. High-Quality Choices - Continue to develop highquality menu offerings that provide customerswith a range of choices that meet their needs andpreferences and that fit in a balanced diet. Consumer-Friendly Nutrition Information -Enable consumers to make the right decisions -continuing to provide even easier access tonutrition information Communicate Responsibly - Continue to refinemarketing and communication practices,particularly to children 29. High-QualityChoices Examples of nutrition information on the packaging.CommunicateResponsiblyparticularlyto thechildren 30. NUTRITION INFO 31. Enviromental issue McD efforts on minimizing environmental impact of restaurants business 32. Energy efficiency Findfurther ways to increase energyefficiency in restaurants to savemoney and reduce our environmentalimpact. In 2007 and 2008, McDonalds was ranked second amongfood service companies by Climate Counts, designatingthe company in the organizations Starting category, as abetter choice for the climate conscious consumer. McDonalds restaurant managers are equipped with avariety of energy management tools, including restaurantenergy surveys and audits, and in selected restaurants,Energy Management Systems (EMS). In 2007, McDonalds USA was named an Energy StarPartner of the Year by the U.S. Environmental ProtectionAgency. 33. Sustainable Packaging & Waste Management Continue exploring ways to reduce environmental impacts of consumer packaging and waste in restaurant operations. 34. 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.McDonalds FranceBeaugrenelle restaurantin Paris with an array ofsustainabilityenhancementsand environmentallythemeddecor. 35. Re-branding: the McDonaldsstrategy McDonalds Value We place the customer experience at the core ofall we do We are committed to our people We believe in the McDonalds System We operate our business ethically We give back to our communities We grow our business profitably We strive continually to improve 36. We place the customer experienceat the core of all we do Allowing franchisees to launch extensiveexperiments in food and dcor, launching Imlovin it marketing theme Providing the customers with high quality foodand superior service, in a clean, welcomingenvironment, at a great value. 37. We are committed to ourpeople Talented people, with diverse backgrounds andexperiences, working together in an environmentthat fosters respect and drives high levels ofengagement, is essential to continued success. McD Employee Benefits are organized into 4categories: Health and Protection Pay and Rewards Investing Employee future Helping Balancing Employee work and life 38. People Priority: McDonalds Approach is to address all employeesinterests 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. 39. We believe in the McDonaldsSystem The balance of interests among the three groups : owner/operators, suppliers, and company employees. 40. We operate our businessethically McDonalds conducts its business to high standards of fairness, honesty, and integrity. And the people are individually accountable and collectively responsible. 41. We give back to ourcommunities Support Ronald McDonald House Charities Support World Childrens Day Ronald McDonald Reading Corner , to utilizeRonal McDonald to promote early literacy.Increase financial and volunteer support toRMHCPartnerships and sponsorshipsOwner/Operator InvolvementDisaster Relief 42. McDonalds serves as theMcDonalds Champion Official Restaurant ofKids programs the Olympic GamesMore than 930 restaurants, McDonaldsChina will support the kind blood donorswith a free orange juice and hamburger toreplenish their nutrients, upon theirpresentation of a blood donation certificate(Sichuan region earthquake relief efforts) 43. We grow our business profitably Provide sustained profitable growth for ourshareholders. Requires a continuing focus on customers and thehealth of the company. 44. We strive continually to improve Anticipate and respond to changing customer, employee and system needs through constant evolution and innovation. 45. CONCLUSION Nowadays fast food are recognized as anunhealthy food However: their income keep on growing,because: they offer: speed, cleanliness, anddelicious food. McDonalds do their repositioning fromunhealthy to healthy fast food. 46. OctawatiBuntaranM987Z249