Mcdonald's Marketing Analysis
McDonald 's has long been an American restaurant favorite. However, in 2003 sales figures showed the fast food empire was suffering to maintain their status.
Stagnant sales, rising costs, failed attempts at new menu items, falling stock price and a lagging quality and service rating by customers all have left the restaurant chain in decline.
What’s the Problem?
At the top for so long, McDonald’s has now found itself lacking in the areas it has long prided itself on: quality and service, according to customer surveys. Drive-thru windows are too slow, improper staffing make “rush hours” more bogged down and their products aren’t as consistent as before. However, that’s not the only reason for the company’s situation. McDonald’s is also facing a rapidly fragmenting market, with new quick meals readily available and a growing restaurant category, the “fast-casual” segment (Cravens & Piercy, 2009, p. 282).
Competitors like Burger King, Wendy’s and Subway have stolen away customers from the fast but fattening Mickey D’s while they sat idol without significant new menu items or campaigns to reach new customers. McDonald’s most popular products, the trademark Big Mac and Happy Meal, have actually been the target of law suits claiming McDonald 's is responsible for America 's poor health – a major sign the company needs a change (The McDonald’s Turnaround Story, 2004). Additionally, in price wars with competition, McDonalds created the Dollar Menu that cheapened product value and decreased profits, some stores even taking a loss on the $1 items. The restaurant’s decline along with heavy-handed management including set prices, fixed menu items and forced kitchen upgrades, has caused one of the most significant problems: franchisers leaving the system.
With an increase in competition, poor products and service and a lack of response to the changing customer and franchise-owner needs, the restaurant chain has to take action to increase profits and accomplish its
Stagnant sales, rising costs, failed attempts at new menu items, falling stock price and a lagging quality and service rating by customers all have left the restaurant chain in decline.
What’s the Problem?
At the top for so long, McDonald’s has now found itself lacking in the areas it has long prided itself on: quality and service, according to customer surveys. Drive-thru windows are too slow, improper staffing make “rush hours” more bogged down and their products aren’t as consistent as before. However, that’s not the only reason for the company’s situation. McDonald’s is also facing a rapidly fragmenting market, with new quick meals readily available and a growing restaurant category, the “fast-casual” segment (Cravens & Piercy, 2009, p. 282).
Competitors like Burger King, Wendy’s and Subway have stolen away customers from the fast but fattening Mickey D’s while they sat idol without significant new menu items or campaigns to reach new customers. McDonald’s most popular products, the trademark Big Mac and Happy Meal, have actually been the target of law suits claiming McDonald 's is responsible for America 's poor health – a major sign the company needs a change (The McDonald’s Turnaround Story, 2004). Additionally, in price wars with competition, McDonalds created the Dollar Menu that cheapened product value and decreased profits, some stores even taking a loss on the $1 items. The restaurant’s decline along with heavy-handed management including set prices, fixed menu items and forced kitchen upgrades, has caused one of the most significant problems: franchisers leaving the system.
With an increase in competition, poor products and service and a lack of response to the changing customer and franchise-owner needs, the restaurant chain has to take action to increase profits and accomplish its
Bibliography: “Cowed into change.” The Economist. Web. Retrieved October 31, 2010. http://www.economist.com/node/1697570 Cravens, D.W. & Piercy, N.F. Strategic marketing. 9th ed. New York, NY: McGraw- Hill/Irwin, 2009 “Our company.” McDonald’s. Web. Retrieved October 30, 2010. http://www.aboutmcdonalds.com/mcd/our_company/mcd_faq/student_research.ht Retrieved October 30, 2010. http://www.icmrindia.org/casestudies/catalogue/Business%20Strategy2/BSTR142