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Chapter 2 Company and Marketing Strategy. Partnering to Build Customer Relationships 65 Real Marketing 2.11 McDonald's: On a Customer-Focused Mission Grach upi product place. price and promotion. While the five wack of com corporate speak company officials maintain that they have pro foundy Changed McDonalds direction and pre on the plan, and the semingly simple in in mission forced McDonalds and its employ ces to focus on quality service, and the rest More than half a century ago, Ray Kroca per year. The new stores helped sales, but rant experience rather than simply providing the 52-year-old salesman of milk-shake-mixingtomer service and desires declined because therapent most convenient option to Cup machines, set out on a mission to transform The company countries and train good work tomers. The Man to Win-which barelyfesona the way Americans eat in 1955, Kroc discor es fast enough Meanwhile, McDonald single sheet of paper snowtrated as sacred ered a string of seven restaurants owned by ingy became target for maliges hide the company Richard and Maurice McDonald. He saw the activos, environments and nutrition McDonald brothers' fast-food concept as a who used the chain of contributing to the Under the Plan to Win, McDonald's got perfect fit for America's increasingly on the insbety epide with per French back to the basic business of taking care of 90, time-squeezed family oriented lifestyles fries and sodas as well as Hy Meals that customers. The goal was to get better not Kroc bought the small chain for $2.7 milion kids with the word of free toys just bigger. The company halted rapid expan and the rest is history sion and instead poured money back into From the start, Kroc preached a motto of Although McDonalds mained the improving the food, the service, the atmo- OSCV-quality service, cleanliness, and value worlds most visited fast-food chain, the once sphere, and marketing at existing outlets These goals became mainstays in McDonalds shiny Golden Arthes lost some of their luster McDonalds redecorated its restaurants with customer focused mission Statement Apply Sales growth slumped, and its market share all dear, sp more modern interiors and ing these values, the company perfected the by more than 3 percent be fast food concept delivering convenient tween 1997 and 2003 good quality food at affordable prices 2002, the company posted its McDonalds grew quickly to become the first-ever quarterly loss. In the world's largest fast-feeder. The fast-food face of charging customer ant's more than 32,000 restaurants worldwide value expectations, the com now serve 60 milion customers each day rack pany had lost sight of its fun ing up system-wide sales of more than 579 b. dimental wlue proposition lion annually. The Golden Arches are one of "We got distracted from the the world's most famlar symbols, and other most important thing hot than Santa Claus, no character in the world is high-quality food at great more recognizable than Ronald McDonald walce at the speed and con in the mid-1990s, however, McDonalds venience of McDonald's, says fortunes began totum. The company cared current CEO Im Skinner. The to fall out of touch wie both its mission and is company and its mission Customers, Americans were looking for fresher needed to adapt better tasting food and more contemporary at In early 2001, a troubled mospheres. They were also seeking healthier McDonald announcedatum rating options. In a new age of health concious around plan-Waitrowca consumers and 55 lttes at Starbucks, Santo Win At the heart McDonalds seemed a bit out of step with the of this plan was a new mission times. One analyst sum it up this way statement that refocused the company on its customers. A McDonald was struggling to find is entity cording to the analyst and a fan of new competitors and changing consumertastes. The company camered from The company was one taledde to another tried to keep pace changed from being the by offering tot del sandwiches and works best quick Service the ArchDeluxe, a heavily advertised new burger restaurant" to being our that flopped. I bought into nonburger franchise customers' favorite place and like Chipotle and Boston Market. It also the way to eat The Plan to Win with its menu no longer ting the buns Lays out where McDonalds switching pickles, and changing the special sauce wants to be and how it plans McDonald's new mission being our customers' favorite on Big Macs None of these things world. All to get there all centered on place and way to eat-coupled with its Plan to Win, got the while, McDonalds continued opening now five basics of an exceptional restaurants at a couple, ma 2.000 stomer experience people, customer experiences. the company back to the basics of creating exceptional McDonald's im Continued on 66 Part One Defining Marketing and the Marketing Process amenities such as live plants, wireless internet-that underscores the important interplay McDonald outperformed its competitors by a acons, and flat-screen TVs showing cable between eating right and staying active notable margin Despite the tough times, news. Play areas in some new restaurants now McDonalds rediscoveredication to McDonald's achieved a lofty 155 percent three feature video games and even stationary bicy omer valued amable lurround your compound annual total return to investors des with video screens. To make the customer Since announcing Plan to Win, McDonald's versus the S&P 500 average of 56 percent experience more convenient, McDonalds sales have nowed by more than 50 percent Thus, McDonalds now appears to have stores now open earlier to extend breakfast and profits have more abled in 2008, the right mission for the times Now, once hours and stay open longer to serve late-night when the stock market lost one-third of its again when you think McDonalds you think diners-more than one-third of McDonald value the worst loose Great Deprevalue-whether its a college student buying a restaurants are now open 24 hours a day son-McDonald's stock and early percent Sandwich for a buck or a working mother at the A reworked menu, crafted by Chef Daniel making it one of only two companies in the Dow drive through grabbing a breakfast latte that Coudreauta Culinary Institute of America Jones Industrial age who share price rose a dollar cheaper than Starbucks. And that has graduate and former chef at the Four Seasons during that you the other was Walmart customers and the company like humning in Dallas, now provides more choice and want Through 2010, as the economy and the rest the chain's catching movinit ty including healthier options, such as an industry as a whole continued to struggle Chicken McNuggets made with white meta line of Snack Wraps, low-fat milk jugs.apple slicens Premium Salads, and the Angus burger Within only a year of introducing its Premium Series womtotonin Antwort the Salads, McDonalds became the world's largest New York Timetawy Adeny, con Sorks Ways to keep Sing Walet salad seller. The company also launched a mach 10. A Cloud Doha Cher Time, by 22, 2010, - jor multifaceted education campaign-themed within www.bcn.com.cnet, it's what I eat and what domovine 2016 Portfolio analysis The process by which management evaluate the products and businesses that make up the company Analyzing the Current Business Portfolio The major activity in strategic planning is business portfolio analysis, whereby manage ment evaluate the products and businesses that make up the company. The company will want to put strong resources into its more profitable businesses and phase down or drop its weaker ones Management's first step is to identify the key businesses that make up the company, called strategic is (SBU). An SBU can be a company division, a product line within a division, or sometimes a single product or brand. The company next assesses the attractiveness of its various SBUs and decides how much support each deserves. When de signing a business portfolio, it's a good idea to add and support products and businesses that it closely with the firm's come philosophy and competencies The purpose of strategic planning is to find ways in which the company can best use its strengths to take advantage of attractive opportunities in the environment. So most stan dard portfolio analysis methods evaluateSBUs on two important dimensions: the attractive ness of the SBU's market or industry and the strength of the SBU's position in that market or industry. The best known portfolio-planning method was developed by the Boston Con sulting Group, a leading management consulting firm. The Boston Consulting Group Approach. Using the now-classic Boston Consulting Group (BCG) approach, a company classifies all its SBUs according to the growth-share matrix, as shown in Figure 2.2. On the vertical is, market groturate provides a mea sure of market attractiveness. On the horizontal axis, relatie market share serves as a measure of company strength in the market. The growth share matrix defines four types of SBU 1. Stars Stars are high growth. high share businesses or products. They often need heavy investments to finance their rapid growth. Eventually their growth will slow down and they will turn into cash comes 2. Cash Cook Cash cows are low growth, high-share business or products. These estab lished and successful Bus need less investment to hold their market share. Thus, they Growth-share matrix A portiolaplarning method the value a company Sous in terms of its market growth rate and relative maricare McDonald's Case study ald Conduct McDonald's SWOT analysis before changing the mission. Discuss McDonald's marketing strategy and marketing tactics