Marketing Strategies. A Comparative Study of McDonalds, KFC and Burger King.

Introduction

ARE YOU LOVIN' IT?

Task

WELCOME! 

You have been appointed as the marketing manager of a new company The Burger World!

You need to analyse the marketing strategies of three popular fast-food outlets in order to increase the success of your very own The Burger World! 

So you have decided to do a comparative study of McDonalds, KFC and Burger King. In order to successfully compare the marketing strategies you need to complete the following activities to understand the concept of marketing strategies among various fast-food outlets. 

You have been given 4 hours to complete the activities and present it as a booklet to the Head of Marketing. 

Your time starts now! Goodluck!

Process

Part 1- Market segmentation and Product

Market segmentation

Question 1:

Watch the two videos and on MS Word type up a 300 word summary of market segmentation. You must define what market segmentation is, outline the characteristics of it and explain the importance of it.

Question 2:

Below are links to videos and articles explaining the concept of market segmentation in relation to McDonalds, KFC and Burger King.  Read and understand all of the articles and answer the questions below.

McDonalds:

http://www.toknow.com.cn/en/scyj.aspx

 https://www.youtube.com/watch?v=XVpZA2bect8 https://sites.google.com/site/mcdonaldsfranchisestrategy/home/mcdonald-s-  positioning

KFC:  

file:///C:/Users/owner/Downloads/19080033-kentucky-fried-chicken-kfc-marketing-mix-four-ps-120919025829-phpapp01.pdf

https://www.ukessays.com/essays/marketing/marketing-concept-and-market-segmentation-in-practice-marketing-essay.php

http://shahedurrahman6.blogspot.com.au/

Burger king:

http://studymoose.com/marketing-segmentation-targeting-and-positioning-of-burger-king-essay

http://marketingmixx.com/marketing-plan-2/306-burger-king-marketing-plan.html

 

a)      Construct a table on MS Excel that summarises the four variables of segmenting McDonalds, KFC and Burger King.

b)      Explain how the products of each company are differentiated from their competitors.

c)       Compare the three company’s segmentation and articulate which company’s segmentation do you think is better and why?

d)      Choose a product you are familiar with and portray the type of positioning strategies used to promote it. You may create a mini PowerPoint presentation or Prezi.

 

Product

Question 3: Construct a table on MS Word to answer the following questions.

a)      View the articles and explain how McDonalds, KFC and Burger King creates menu which emphasises on what the customers want.

McDonalds: http://www.marketing91.com/marketing-mix-mcdonalds/

McDonalds: http://businesscasestudies.co.uk/mcdonalds-restaurants/the-marketing-process/the-4ps.html#axzz45bBNiTvc

McDonalds: http://www.slideshare.net/natashasingh5876/mcdonalds-research-project-fom

KFC: http://www.marketing91.com/marketing-mix-kfc/

KFC: http://www.slideshare.net/bhaventhakrar/19080033-kentuckyfriedchickenkfcmarketingmixfourps-14341524

Burger King: http://www.bk.com/menu

Burger King: http://panmore.com/burger-king-marketing-mix-4ps-analysis

 

b)      View the articles and explain how McDonalds, KFC and Burger King adopted the concept of “Think Global, Act Local” in different countries.

McDonalds:http://www.slideshare.net/natashasingh5876/mcdonalds-research-project-fom

McDonalds: http://www.sciencedirect.com/science/article/pii/S1877042812053566

KFC: http://www.thedailymeal.com/travel/10-unique-kfc-meals-around-world-slideshow
Burger King: http://www.bk.com/international

 

c)       Deduce the importance of market research in the creation of each company’s menu.

 

Question 4: Branding

Read the articles below and answer the following questions on MS Word.

 

a)      Define Branding.

b)      Identify the benefits of branding for consumers and the businesses.

c)       What branding strategy does McDonalds use to have become the most popular fast-food outlet in comparison to KFC and Burger King?

d)      Why both KFC and BurgerKing have have considered rebranding?

e)      Do you think by rebranding KFC and Burger King have made the right choice? Justify your answer.

f)       When deciding on the brand strategy, indicate the considerations a marketer must take into account.

 

Question 5: Packaging

Read the articles below and answer the questions.

 

a)      Explain McDonald’s evolution of packaging ever since it has existed.

b)      Do you like the new packaging approach of McDonalds? Justify your answer.

c)       Does the new packaging of McDonalds have any impact on your preference over KFC and Burger King? Justify your answer.

d)      Why did Burger King adopted to a new packaging approach?

e)      Explain why packaging is critical to business success?

f)       Why do you think McDonalds, KFC and Burger King have chosen to package their goods in such a way?

g)      Examine how packaging can be used as marketing strategies.

 

Part 2- Price and Promotion

Price

Out of all marketing mix elements, price would be the most flexible. This is so because businesses can adjust prices much easily than they can adjust the product, redesign the promotional campaign or change the distribution system. Price can be adjusted quickly in response to competitor’s actions or changes in the marketplace.

Question 6: Pricing method

 

a)      Clarify why a retailer is likely to adapt to a cost-based method to pricing?

b)      State the formula used to calculate the price using the cost-based method.

c)       As the marketing manager of a company, you have just received a shipment of units. The units cost you $385 each and your usual is mark up is 75%. Calculate the final selling price and explain what you will do to the price if your business has exclusive distribution of this highly fashionable product.

d)      How is market based pricing determined?

e)      Identify the advantages and disadvantages of competition based pricing.

f)       Explain why a business will use competition based pricing?

Question 7: Pricing Strategies

 

a)      State what motives might lead a business to adopt a price skimming strategy.

b)      Identify a possible problem with using price skimming strategy.

c)       Account for why a business will use the loss leader pricing strategy.

 

 

d)      Construct a table on MS Excel and demonstrate what pricing strategies do McDonalds, KFC and Burger King adopt to.

e)      Fill in the below table

Unbranded new product

Recommended pricing strategy

Justification for this strategy

Imported leather lounge

 

 

A range of jewellery

 

 

Bottled water

 

 

Mobile phone

 

 

T-shirts

 

 

 

f)       Compare the prices of a standard burger meal at McDonalds, KFC and Burger King. Which offers the highest and the lowest price?

g)      Watch the following YouTube video and explain which outlet will you prefer the French fries. Justify your answer.

https://www.youtube.com/watch?v=2FtQy_IO11Y

 

h)      Go to the following website of McDonalds. https://buildyourburger.mcdonalds.com.au/?_ga=1.10141308.835395652.1460452852

Navigate the page to build your own burger from the “Create Your Taste” option. Create your burger and see how much the cost adds up to. Now compare the cost of your burger in comparison to a BigMac burger. What does the difference in price tell you?

i)        Research and inform on why has McDonalds opened up the new “Create your taste” kiosks around their outlets?

j)        Explain why some customers are prepared to pay a high price for a product?

Question 8: Financial data

McDonalds

Revenue

25.4 billion (2015)

Net income

4.5 billion

Total assets

34.28 billion

Total equity

12.85 billion

KFC

Revenue

25.21 billion (2015)

Net income

1.23 billion

Total assets

20.81 billion

Total equity

8.56 billion

Burger King

Revenue

1.14 billion (2013)

Net income

2.33.7 million

Total assets

1.07 billion

Total equity

1.51 billion

 

a)      Interpret the above data for McDonalds, KFC and burger King.

b)      Construct a line graph to summarise the above data.

c)       Construct a column graph to summarise the following data.

d)      Construct a pie chart to demonstrate the market share for the following data.

Rank

Company / Chain Name

2014 Sales

Average Sales Per Store

1

McDonald’s

$35,600,000,000

$2,600,000

2

Subway

$12,100,000,000

$481,000

3

Starbucks

$10,600,000,000

$1,223,000

4

Wendy’s

$8,600,000,000

$1,483,800

5

Burger King

$8,587,000,000

$1,195,000

6

Taco Bell

$7,478,000,000

$1,363,000

7

Dunkin’ Donuts

$6,264,200,000

$857,400

8

Pizza Hut

$5,666,000,000

$883,000

9

Chick-Fil-A

$4,621,100,000

$3,157,900

10

KFC

$4,459,000,000

$957,000

11

Panera Bread

$3,861,000,000

$2,427,200

12

Sonic Drive-In

$3,790,700,000

$1,074,000

13

Domino’s Pizza

$3,500,000,000

$710,200

14

Jack in the Box

$3,084,900,000

$1,379,000

15

Arby’s

$2,992,000,000

$993,200

16

Chipotle Mexican Grill

$2,731,200,000

$2,113,000

17

Papa John’s

$2,402,400,000

$829,000

18

Dairy Queen

$2,300,000,000

$545,000

19

Popeyes Louisiana Kitchen

$2,253,000,000

$1,242,000

20

Hardee’s

$1,900,000,000

$1,145,000

21

Panda Express

$1,797,400,000

$1,237,000

22

Little Caesars

$1,684,000,000

$465,000

23

Whataburger

$1,476,800,000

$1,996,000

24

Carl’s Jr.

$1,400,000,000

$1,470,000

25

Jimmy John’s

$1,262,800,000

$878,800

 

Promotion

To sell more of its products a business has to change customer’s behaviour through persuasion. This is achieved through promotion as it describes the methods used by a business to inform, persuade and remind a target market of its products.

Question 9: Promotion mix

 

a)      What does promotion attempt to achieve?

b)      Create a table and summarise the four elements of the promotion mix

c)       Explain advantages of advertising

d)      Select and justify which advertising media you will choose to be the most effective if a business wants to communicate with a mass market and a niche market.

e)      Why would some marketers prefer to use personal selling as a promotional strategy?

f)       How can personal selling be much more persuasive than advertising?

Question 10

 

a)      How does McDonalds use public relations and sales promotion in its marketing strategy?

b)      Explain KFC’s strategy of launching its new cricket campaign. What benefits will it account for KFC?

c)       Compare the promotional mix of McDonalds, KFC and Burger King. Which outlet’s promotional strategy do you favour the most? Justify your answer.

 

Part 3- Place and People, Processes and Physical evidence

Place

Once business manufacturers a product it must ensure that the product gets into the customers hands. For this to occur successfully an effective distribution system is required because most products are not used by the same business that makes them.

Question 11: Distribution Channels

 

a)      Explain the importance of distribution in the marketing process

b)      Propose distribution channels for the following:

Daily newspaper

Washing machine

Imported motor vehicle

Office furniture

c)       Create a flow chart to portray how an e-commerce transaction could take place.

Question 12:

 

a)      What distribution strategy does McDonalds, KFC and Burger King use?

b)      Which do you favour more? Justify your answer.

Question 13: Channel Choice

 

a)      Which category of channel choice will McDonalds, KFC and Burger King fall under? Justify your answer.

b)      Account for why a business would select an exclusive rather than an intensive distribution strategy.

 

People, Processes and Physical evidence

Although the three P’s role in the success of the marketing process may not be as obvious as the original four P’s, they still play an important role in ensuring the success of the product.

Question 14:

 

a)      Why is it important to extend the marketing mix in the current business environment?

b)      Explain why all businesses should develop a culture of customer focus and put it into practice.

c)       Create a table to summarise the extended P’s of McDonalds, KFC and Burger King.

d)      Select which P’s of the marketing mix you consider most likely to be associated with customer service. Justify your answer.

e)      Select in which fast food outlet (McDonalds, KFC or Burger King) the ‘people’ element is outstanding. Justify your answer based on your personal experiences as well.

 

Part 4- E-marketing and Global marketing

E-marketing

Question 15: Go onto the Facebook page of McDonalds, KFC and Burger King.

a)      Which attracts your interest more? Why?

b)      Which is easier to navigate and find the necessary information? Why?

c)       Investigate the potential of each to achieve the marketing objective of increasing market share.

Question 16:

https://www.quirk.biz/resources/88/2/What-is-eMarketing-and-how-is-it-better-than-traditional-marketing

a)      Research and Create a 500 word report that can be used by a number of different businesses which includes advice on the following:

-          Setting up, maintaining and improving a website

-          Promoting the website

-          Improving online market share

-          Establishing online payment options

 

Global Marketing

Question 17:

 

a)      How does McDonalds manage to stay the highest in terms of maintaining its branding success internationally?

b)      How do you compare KFC and Burger King’s global branding compared with McDonalds?

Question 18:

 

a)      Create a table explaining the global marketing strategies for McDonalds, KFC and Burger King.

b)      Justify which outlet’s global marketing strategy you favour the most.

c)       Distinguish between standardised and customised global marketing strategy.

d)      Account for why McDonalds would use a combination of a standardised and customised marketing strategy.

e)      Examine how competition in the overseas market affects global pricing.

f)       A manufacturer of shoes has decided to export to china. The marketing manager assumes that with such a large population a lot of shoes can be sold. Assess whether china might be a good or bad market opportunity. 

Evaluation

Criteria

Mark
  • Limited or no description of the answer
  • Absent/superficial explanation of answers
  • Inconsistent or incorrect use of vocabulary

Fail

0 - 14
  • Frequently accurate description of the answers
  • demonstrates understanding of the answers
  • Mostly relevant terminology and facts used

 

Pass

15 - 19.4
  • Accurate description of the answer
  • Demonstrates good understanding of the answers
  • Relevant terminology and facts used
  • Satisfactory level of explanation used.

Credit

19.5 – 22.4
  • Accurate description of the answers
  • Demonstrates excellent understanding of the answers
  • Uses variety of relevant terminology and facts
  • Excellent level of understanding used.

Distinction

22.5 – 25.4
  • Accurate description of the answers
  • Demonstrates superior understanding of the answers
  • Uses superior command of relevant terminology and facts
  • Superior level of understanding used.

High Distinction

25.5 - 30
Conclusion

Congratulations!

The Head of Marketing is so proud of your work that he has decided to use your booklet to provide new marketing managers with the support for initiating marketing strategies.

Well done!