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MARKETING...

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CENTRE FOR FOUNDATION STUDIES FHBM1124 MARKETING SEMESTER 202001 TUTOR: Ms.Ang Chin Ing TUTORIAL GROUP: T1 COMPANY: McDonald's Prepared by No

Name

Student ID

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Alfred Lim Jin Haw

19UHF06412

2

Lok Chuen Hang

19UHF02745

3

Lee Zi Jia

19UHF04573

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Liew Sum Yee

19UHF03030

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Philp Yong Zhi Xiang

19UHF01392

6

Tin Jervis

19UHF06521

7

Tan Kai Wen

19UHF06101

8

Wong Zi Lin

19UHF06086

Date of submission 31/07/2020

Content No 1

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Title Company background

Product Strategy

Pricing Strategy

Place Strategy

Promotion Strategy

Conclusion

References and Appendices

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Remarks

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3-6

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10-13

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1.1 Introduction of Mcdonalds company McDonald's is recognized as one of the most successful and well-known brands in the world. They are famous around the world for their famous fast food, mainly hamburgers. The burger brand was founded in 1940 by two brothers, Dick and Mac Donald, who ran the first McDonald's restaurant in SAN Bernardino, California. After all these years, McDonald's has revolutionized the food industry, affecting the lives of those who prepare and eat the food. In addition, McDonald's has a long-standing commitment to social events and has been a major sponsor of the most official and special events, such as the World Cup since 1994 and the Olympic Games in 1976. McDonald's has achieved great success, including more than 30,000 franchises in 120 countries, serving more than 47 million people daily and generating $15 billion in annual revenue. In addition, consistency, quality and cleanliness have three important characteristics. Thus, In 1961, Roy Kroc founded the University of Hamburg, which offers a bachelor's degree in Hamburg, which aims to satisfy and emphasize consistency, professional service, quality and cleanliness. Company mission McDonald's ® 's mission is to be our customers' favourite place and way to eat - inspired people who delight each customer with unparalleled quality, service, cleanliness and value every time. Company vision McDonald’s corporate vision is “to move with velocity to drive profitable growth and become an even better McDonald’s serving more customers delicious food each day around the world.”

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2.1 Product Strategy For looking into a new product or modify an existing product in order to increase the overall sales of the Mcdonalds, we have targeted university students as the target customers. Through the survey filled in by the university student, our team found and detected that a lot of university students want to save their time and majority select the fast food of their meals. For the longest time, these issues will lead to health issues like obesity and overweight. Other than that, via the survey form students wish that they can cook more healthy dishes by themself. After the discussion, we made the decision to produce a new product called Mcdonalds Avocado Series meals. Mcdonalds Avocado Series includes an avocado burger, avocado flavour ice cream and avocado pie. Three levels of product i) Core benefit Mcdonalds Avocado series meals are the problem-solving benefit or service that consumers seek for. The students who like the preferences their lunch and dinner eat become healthier. Moreover, Mcdonalds Avocado series meals are also suitable for people who are losing weight currently but looking for fast food can try this kind of series meals. Furthermore, students who like the preferences of the unique and specialization taste will seek for this product to maximize their satisfaction ii) Actual Product Mcdonalds Avocado series meals are high-quality food. Because we are using the organic avocado import from Jeju-do Island, South Korea. The reason why is because avocado from Jeju-Do is most soft and organic . and In addition, even the consumer will taste smooth when eaten. Also, the design of our new packaging is very useful, easy to carry and the packaging is made of eco-friendly material. iii) Augmented Products The augmented product is the additional consumer service and benefits offered by the products. The basic recipe and interesting information will be provided on the packaging of the products because it can let consumers try to make it at home. After that, the code also will be provided on the packaging, it can scan it and access online lucky draws to win the prize and coupon.

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Product & Service Decisions i) Product Attributes After modifying the new product which is Mcdonald’s avocado series meals. It makes consumers experience different tastes of burger, ice cream and pie. Also, it can lower the cholesterol of the consumer, especially our avocado ice cream and avocado pie can be a healthier and more nutritious option than regular ice cream. In addition, an avocado addition to the meals (burger) will enhance the nutrient quality of the diet. ii) Branding Our brand name is called Avocado series. The logo for avocado series will be more clear and more easily recognizable and reproducible. The theme colour of the brand logo is a warm green colour. What’s great is that it’s an avocado logo and our brand name ‘avocado series’ typography inside the square in the brand logo. The reason why we design this colour is that it can be more attractive and noticed by the consumer. The brand name ‘avocado series’ helps consumers identify products that might benefit them. Thus, when consumers notice and look up at the brand name logo they will realise that it is a healthier product. Moreover, loyal customers know that they will get the same features, benefits and quality each time they purchase the products.

iii) Packaging Our company is concerned and serious about packaging. Therefore, we are using material that is eco-friendly. Plus, our packaging will not have any content of plastic in it and the size of our packaging would be suitable for the Mcdonalds Avocado series meals.

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iv)Labelling Mcdonalds Avocado Series Meals are labelling an avocado logo sticker in the packaging. After that, we will label the nutritional label such as how much protein, calories, sodium, sugar and so on. The label allows consumers to identify the product and get information about the food clearly and lets the consumers eat safely.

v) Product Support Services Mcdonalds also has an online order service via McDonald’s website and application after that our drivers will send the food to your place. Thus, Mcdonald website and application also provide feedback form to the consumer to fill in their comment after eating the Mcdonalds Avocado Series Meals. Lastly, Mcdonalds also supplies hotline calls to allow consumers who are willing to ask for more information about the product.

2.1.1 Physical product prototype

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Diagram 2.1.1 Diagram 2.1.1 is the prototype of the product. For the outer view of the packaging, the design of the packaging is useful and suitable as well for the consumer. For example, it has a handle to ensure our consumer is easy to carry. Other than that, the lower-left corner has provided QR code thus lets our consumer scan it after that access the lucky draw to win a coupon and prize. Also, in front of the packaging has the branding logo of avocado series. Beside left of the packaging will provide nutrition labelling and other information to allow the consumer to get information clearly at all, the material of packaging is an eco-friendly material as well. The prototype also shows the flat of the packaging. Last but not least, the last part of our important product ‘avocado series’ which is an avocado burger, avocado pie and avocado ice cream. Our avocado is imported from Jeju-do island, south Korea.

2.2

Pricing Strategy

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Pricing Strategy is the method that McDonald's uses to set the price for our new products. In our new product, Mcdonalds Avocado Series includes an avocado burger, avocado flavour ice cream, and avocado pie. There are several different pricing strategies for us to use to set the pricing for our new product such as product mix pricing strategies and price adjustment strategies to target UTAR students. The main goal of those strategies is to help the company earn the profits. Product Mix Pricing Strategies The product mix pricing strategy is a set of prices that maximize the profit on the total product mix. We will use the product bundle pricing to become one of the pricing strategies. Product bundle pricing is combining several of our products and offering the bundle at a reduced price. In our Avocado Series bundle has an avocado burger, avocado flavour ice cream, and avocado pie. These new product unit prices are RM9.80, RM2.40, and RM3.50. However, our avocado bundle pricing set on RM13 includes all avocado series products and additional French fries and a cup of juice. This bundle pricing helped customers save RM3 and above. Price Adjustment Strategies The price adjustment strategies mean the company adjusts its basic price to account for differences in customers and situations. There are seven price adjustment strategies: Discount and allowance pricing, segmented pricing, psychological pricing, promotional pricing, geographical pricing, dynamic pricing, and international pricing. For our avocado series, we choose segmented pricing as our price adjustment strategies. The reason we choose this strategy is that we can adjust the price for differences in customers, products, or locations. For example, we will be having a promotion of having lunch that is cheaper than dinner. With this strategy, we can attract more customers at different times. The second price adjustment strategy is through psychological pricing. Psychological pricing is the business practices of setting prices lower than a whole number. The idea behind psychological pricing is that customers will read the slightly lowered price and treat it lower than the price is. This strategy can allow us to adjust prices for psychological effect. For example, we will set the price of a burger as RM9.80 but conveyed by the consumer as RM9 and not RM10, treating RM9.80 at a lower price than RM10. Our third price adjustment strategy is through promotional pricing. Promotional pricing is a sales strategy in which brands temporarily reduce the price of a product or service to attract prospects and customers. By lowering the price for a short time, a brand artificially increases the value of a product or service by creating a sense of scarcity. Promotional pricing can help with customer acquisition by encouraging cost-conscious shoppers to buy. It can increase revenue, build customer loyalty, and improve short-term cash flow. This strategy can increase sales by temporarily reducing prices. For example, we will have a one-week promotion which can have

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one set of avocado series food by paying only RM10. This can save Rm 3 for a customer and also can increase our sales in a short period.

2.3 Place strategy Place strategy is used by companies to reach their product out to consumers. Companies should consider how to promote new and also existing products to the market for consumers. Normally companies have different distribution channels to reach their product to consumers and 8

as for McDonald, they use both distribution channels which are direct channel and indirect channel.

For direct channels, Mcdonald is using an online ordering method to reach their consumers directly. McDonald provides online websites to let consumers directly order from their channel. McDonald also provides different payment services to consumers to directly connect them together. The benefits of using a direct channel are that sometimes McDonald can collect direct feedback from consumers, improve product quality by observing and collecting information about consumer’s taste and preferences. It also helps McDonald's to shortlist their menu with the unpopular product. Mcdonalds uses indirect channels which consist of high transportation cost and fast delivery by air transportation. Although this method consists of high cost, the franchises from different countries help to promote and increase the company's reputation. Moreover, having franchises in different countries further provides the company with valuable information about the customer's taste and preferences, allowing the company to improve and expand in the right direction. However, the franchise owners bear the responsibilities and costs of theft, damage and obsolescence. That indicates that the franchise owners might cause a reduction in the reputation of the company. Franchises are a way of indirect sales. An individual who wishes to open up a franchise of a certain company will need to pay a certain amount of money to buy the name of the company. The company will then send sufficient staff with training to work in the franchise store. However, the damage of goods will be covered by the owner him/herself. But other than that, franchise owners can earn extra profit from consumers. Franchise owners also can collect feedback and maybe potentially even change the product themselves with the permission of McDonald’s and may even create something more delicious which attracts more consumers to come and have a taste.

2.4 Promotion strategy Push and Pull Strategy The Promotion Strategy that we use in our company is the combination of push and pull promotion strategy. Push strategy involves “pushing” the product through distribution channels to final consumers. For example, our company is using a push strategy like transaction selling

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and relationship selling. Besides, the pull strategy is that the producer directs its marketing activities toward final consumers to induce them to buy the product. For example, our company is using mass media strategy, sales promotion and discounts to our consumers. Integrated Marketing Communication i)Advertising The next tools in the promotion mix that our company used is advertising. Advertising is any part form of nonpersonal presentation and promotion of ideas, goods, or services by an identified sponsor. Our company uses informative advertising to promote our product in different ways like TV commercials, radio, internet and newspaper. We can communicate and interact with a huge amount of audience through advertising. Consumers will be easier to remember our brand identity through TV commercials, radio and so on. Our company uses printed media which is a newspaper to advertise our new product, Avocado series products to reach a high number of potential customers in the future. Social media is a great mediator between potential customers and the brand. In today’s technologically advanced society, social media has become one of the lives of most people, especially university students. Therefore, when the product is promoted on social media, it can increase its awareness to let more university students know about this product and the benefit for them. The Internet is a wide media that can advertise our new product. This may include websites, web pages, blogs or social networks such as Facebook, Instagram, WeChat, Twitter and so on. Our company was highly working on this media because of this kind of advertising is low production cost as it might save a lot of cost for other uses. Otherwise, our company also places the product's information on our official website for customers to have a look. One form of advertising that is sometimes overlooked is transit advertising, which displays marketing messages and advertisements on public transportation. This may include Rapid KL bus, MRT, LRT, KTM, as well as a bus station or MRT station and waiting areas. It is hard to ignore and will attract everyone’s attention to promote public transportation. Companies can take advantage of this by creating an advertisement with colourful and innovative designs. Advertising in the transportation sector usually has one thing in common, which is they are large and eye-catching. Due to the nature of public transportation, the scale of advertising in these areas will be very large, which will attract more attention. Most of the students usually take public transport to school, so they can know about this product when they are taking a bus or MRT. The picture below is a sample of advertising in MRT station.

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ii)Sales Promotion Sales Promotion is also one of the promotion mixes that we used to promote our new product. Sales Promotion is short-term incentives to encourage the purchase or sale of a product or service. Our company uses consumer production by sending some promoters to the supermarkets to promote our product so customers can understand our product more deeply. The promoters will implement face to face interaction to promote our new product, Avocado series products for our customers which is tasting it. We will also provide coupons for customers to discount off the purchase price and sampling for the customers to try our product. We also use trade promotion which will get retailers to carry new items and more inventory, buy ahead, or promote the company’s product and give them more shelf space. These two types of promotion we use will help to dramatize our products and offer strong incentives to purchase. iii) Event Marketing Event marketing is a promotional strategy that involves face-to-face contact between brands and their customers at events like conferences, trade shows and seminars. Each event is different, it has different audiences and different content. Therefore, it deserves to be marketed in its own unique way. For example, we do an event at different shopping centres for our new series products, Avocado series products. Besides, we will also set up some game stores for customers to play. In the game stores, customers who win can get some vouchers or samples. Through this event, customers can know that McDonald's is launching new products.

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Conclusion In conclusion, Mcdonalds restated their marketing strategy by using permanent product strategy, Temporary product strategy and also local adaptation strategy as their product strategy. Mcdonalds is considered a consumer product as it is cheaper and can be found all over the city. By having a new vision on the market, Mcdonalds has innovated Avocado Series Meal which is tastier and healthier than any other fast food. In order to increase the sales and profit of the company, Mcdonalds uses product mix pricing strategy and also price adjustment strategy to target university students. By selling our Avocado series meal in a bundle form, students could enjoy different kinds of food that contain avocado in just one price and save more money. In that case, students will select the bundle set which is cheaper than buying them one by one (ala-carte). As Mcdonalds is a famous F&B company, Mcdonalds will always be sure that their price is reasonable and contains fresh ingredients in order to stand firm in the market with many companies fighting for profit. Consumers will always be attracted by cheap and valuable things and also foods. Therefore, Mcdonalds is doing a good job to attract university students to buy their Avocado Series Meal and also other foods available. Last but not least, Mcdonalds put a lot of effort into promotion to increase its sales when the new product was released. Mcdonalds will advertise and conduct promotion sales to let people know that there will be a new product coming out to the market. Students or any other consumers will always browse online for news and information. Therefore, Mcdonalds did online promoting which will be expos...