Mc Donald\'s vs Lotteria PDF

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McDonald’s vs Lotteria Virtually everyone has their favorite fast-food restaurant that appeals to their tastes. Nonetheless, deciding on something like that becomes exponentially harder since there are so many fast-food restaurants nowadays. Whether that choice was made simply out of popularity and the vast presence of the restaurant or simply personal preferences, many factors play into comparing the various establishments. Some of these factors include food quality, service, facilities, cost, convenience, business model, cleanliness, delivery service, and location. It’s evident not all consumers tend to examine all aspects of choosing a favorite fast-food restaurant, but it helps to compare and contrast the specific branches of 2 restaurants to get a good picture. Two of the more prominent fast-food restaurants in Daejeon are McDonalds and Lotteria, specifically the branches located in the Daejeon bus terminal. The global fastfood giant McDonalds and the more local fast-food giant Lotteria may both fit under the same umbrella of the fast-food industry yet differ in more ways than one in many various aspects. Firstly, the largest aspect often given the highest priority is food quality. Food quality makes or breaks a person's preference for a restaurant, so all establishments prioritize improving their food quality. Whether that is through the typical means of buying fresher produce or better flavor combinations for their menu items, both McDonald's and Lotteria have above-average food quality and taste. Both eateries use 100% beef from Australia and New Zealand giving their beef burgers an authentic taste. Moreover, both use fresh ingredients and nutritious ingredients to make their burgers, but they differ in terms of assembly time. Some McDonalds burgers are pre-made depending on the past orders so they can make some burgers beforehand and serve as soon as possible whereas Lotteria makes the burgers from scratch which gives it's a fresher taste. Nonetheless, the taste may be subjective from person to person, but burger assembly time still affects the taste quality. Also, the

signature french fries of both restaurants are crispy, hot, and fluffy, and both prioritize the removal of trans-fats through the frying using vegetables to help reduce the risks of heart disease. From personal experience, McDonalds burgers simply feel robotically made due to the assembly line that creates every burger identically through the use of the same quantity of ingredients so Lotteria appeals more to the “made with love” aspect of burger eating. In terms of food quality, Lotteria is the winner. Secondly, service quality is another major determinant of a customer’s attitude towards a particular restaurant. Both McDonalds and Lotteria aim to provide the quickest and most convenient service possible. McDonald and Lotteria offer self-service machines to pick and choose all details of the order or an order stand to dictate the order to the employee at the cashier. As mentioned earlier, McDonalds goes even further and pre-makes some burgers 510 minutes earlier and add the toppings later in the process to provide the customer with their order faster. This is why some McDonalds restaurants can service in under 5 minutes for some of their orders. Similarly, with Lotteria, they also focus on “rapid service tolerating no wait to customers” (Lotteria, n.d.). From personal experience, McDonalds has always been the fastest of all the fast-food restaurants in terms of time to order. Not only does good service quality include high speed of service, but it also entails warm and friendly customer service by the employee towards the customers. In this regard, the employee-customer attitudes vary drastically from branch to branch. In comparison to food quality, service quality is not something that can stay consistent at all times but from past experiences with talking with the employees, both restaurants have friendly employees with bubbly personalities to help fulfill needs and satisfy the customers. Concerning service quality, McDonalds comes out the winner. Another aspect of fast-food restaurants are the facilities provided by the establishment. One would never pay attention to this as its expected that the basic facilities

are provided by the restaurant, but it is something to consider when examining certain branches in Korea. In the case of the branches at the bus terminal, both restaurants do not have a bathroom. It sounds as if both McDonalds and Lotteria are taking the “fast-food” aspect of eating a bit far and expecting that many of the customers will not need to use a bathroom since they are there is to eat food quickly. This could also be because there is a public bathroom not too far from the restaurants but in any case, it is still a bit unique to not have a bathroom available in the restaurant. Another aspect is facilities management done in the kitchen area and this includes the management of all the equipment used for preparing food. Many would presume that maintaining the operational capacity of the equipment under heavy use would be harder if more customers were coming in the door. In this case, McDonalds usually seems to have more customers in a given day, so their facilities management is probably better than Lotteria’s. Thus, McDonalds seems to be the winner concerning the facilities offered in the branches. Cost is also a big factor that affects the customers' affinity for choosing a certain restaurant over another. In this respect, the large-scale operational capacities of both McDonald's and Lotteria help them reduce costs by taking advantage of their scale. Although McDonald's is the more globally dominant fast-food restaurant, Lotteria has the upper-hand as it has a larger presence in the South Korean market. Lotteria outshines with its 1,300 locations over McDonalds with its 447 locations across the country. This large difference in the number of operating restaurants gives Lotteria an advantage as the company can use that money to further increase expansion efforts and operational capacity. Whether that is by increasing the bulk-purchasing of certain products or reducing operational expenses to reduce per item cost, Lotteria beats McDonalds on the menu item cost front.

Figure 1. Lotteria’s burger menu prices, 2020

Figure 2. McDonalds burger menu prices, 2020 As an example, when taking a look at the burger selections, figure 1 shows the Lotteria burgers range from 2,500-7,000 won with the average price of a burger around 4,900. On the other hand, figure 2 shows McDonalds burger prices range from 2,700-7,900 won with the average price of a burger of around 5,100 won. The averages were calculated by the additions of prices for the burger menu items and diving them by the number of burger selections. Even with Lotteria’s 14 burger selections vs McDonalds’ 18 burger selection, McDonalds was expected to have the lower average burger price but that just wasn’t the case.

Although these may not seem like large differences, on a larger scale with billions of dollars involved, small percentages can produce large returns. Regarding cost, Lotteria beats McDonalds by the slightest difference. Convenience also factors in when having a certain preference for a restaurant. A lot of things come into a factor for estimation the "convenience" of a restaurant but the main factors speed of service and low price. Since as discussed in the previous paragraph about cost, both restaurants already have lowered the prices to an absolute minimum through the scaling of their operations and lowering of peripheral cost to help lower the menu item cost. Convenience more or less boils down to the speed of service since that is one of the biggest factors for going to a fast-food restaurant. Consumers are seeking a fast and quality service in return for their money. This is why both Lotteria and McDonalds try to speed up their order assembly time through techniques such as the previously discussed "pre-making" of basic burgers beforehand. Judging from personal experience, nothing ever beat McDonalds in its convenience of ordering and receiving the meal. The order taking process also factors into this why is why both restaurants speed up the order of this process by using self-service machines. Furthermore, self-service machines improve convenience for those wishing to place an order without having to interact with another individual. Both restaurants have a similar functioning self-service machine to serve their base function with not too many glaring differences. Taking into consideration the convenience of the branches, McDonalds takes the cake. The business model of a fast-food company also plays a role in the company’s longterm success. Since the core business model of Lotteria and McDonalds are the same, the business model of the restaurants refers to the company's marketing strategies and the overall reputation of the company. Lotteria was already established as the domestic fast-food brand for Korea whereas McDonalds maintains its international presence as the American fast-food

market leader. McDonalds' expansion into the Korean market was successful at first because there was a certain status symbol associated with eating at McDonalds. Although, over time this aura around McDonalds wore off as the more partisan and health-conscious of the Korean citizens stuck to the Lotteria as the original fast food market leader in Korea. Lotteria’s initial presence had already established them as the major burger join in Korea. The Lotteria menu items catered to the Korean tastes whereas McDonalds “met continual barriers in menu development and advertising since McDonald’s headquarters prioritizes its identity as a global brand” (Yu-Kyoung, 2016). The major problem appears to be the inability of McDonalds to create loyal customers in different markets, which gives Lotteria a major home advantage. Concerning the business models of the branches, it's difficult to choose a winner between the giants of the domestic and international markets. Nevertheless, Lotteria appears to be more assimilated to the Korean culture and flexible in its marketing operation which will beat out McDonalds in the long run. Cleanliness is another aspect that can sometimes go unnoticed if the goal of going to eat fast food is to simply have a quick bite. Due to the high foot traffic in the bus terminal area, both restaurants are not spiffy clean by all means but Lotteria manages the cleanliness better than McDonalds. Lotteria had sanitizer places near the entrance for people to sanitize their hands when walking into the restaurant whereas McDonalds did not. The floors of both restaurants were fairly dirty because of the previously mentioned high food traffic in the area but it seemed as Lotteria's floors were a tad bit cleaner from a glance. The tables in Lotteria were far cleaner and seemed wiped down every few hours compared to McDonalds tables which had lots of crumbs and oily smears across many of the tables. The aromatic atmosphere of both of them was also different. In that regard, the aroma of the seating areas of McDonalds was better simply because more orders were being made which spread the

aroma of the burgers throughout the restaurant. All in all, in terms of cleanliness at the branches, Lotteria appears much cleaner than McDonalds. Nowadays delivery service is becoming more prevalent since a large majority of the population stays inside. This makes delivery another major point of comparison but doesn’t seem to apply to these branches located in the bus terminal. Delivery times for food depend on the distance of the restaurants to the customer so it’s expected that branches located in the same location would delivery at the same time. Nevertheless, an argument can be made that since Lotteria has more fast food locations than McDonalds, Lotteria would deliver from the location closet to the customer. Another aspect of delivery service is the condition of the order before and after the delivery. Many of the restaurants use the same local food-delivery service so the delivery service would average out among both of them. Comparing the branches based on delivery, both share the same location and work together with the same food-delivery service therefore delivery times and service are fairly similar. Lastly, the location of the two restaurants can play a big role in the number of customers that visit and the revenue each franchise makes. The specific branches being compared are the Daejeon branches of both restaurants located near the Daejeon bus terminal. The Daejeon bus terminal is a central hub where a majority of the people traffic to and from, so it is obvious for the reasoning behind opening a restaurant in this area. Both Lotteria and McDonalds are in front of the main entrance of Emart located left and right respectively. This positioning seems to be an aggressive competitive strategy to get customers to choose either of the restaurants the second they enter the building. Both Lotteria and McDonalds positioned in the location where a consumer both enters and leaves the building, so it increases the chances of the consumer having to choose to dine at either one of the restaurants after entering or before leaving. Undoubtedly, this positioning is also ploy for both businesses to try and steal the foot traffic involved in the area due to the presence of the other. It is

probably not a far fetch to assume this helps with increasing potential revenue for the specific branch. Regarding the winner location-wise, both branches are in the same area so there is no clear winner. The survey conducted to evaluate the different points of comparison for these fastfood restaurants, those who qualified as having visited both restaurants were chosen to participate. For the 21 chosen participants, a set questions were given to rate the different aspects of both restaurants out of a 10. Therefore, the purpose of the survey was to tally up the ending results as well as observe which restaurants end up being the winner amongst the chosen survey participants. Although the major limitation of the survey were the participants as they only consisted of students, the results were intriguing, nonetheless.

Figure 3. Total ratings for points of comparison, 2020

Figure 4. Preferred restaurant tally among survey participants, 2020 As seen from Figure 3, Lotteria was the winner in terms of collective ratings received for the individual’s categories for comparison. Despite these results, the final questions of the survey required the survey participants to state their preferred restaurant. In this regard, Figure 4 shows McDonalds was the overarching winner with 13 people choosing McDonalds as their preference. It appears the global brand presence of McDonalds appeals to the students a lot more than the local counterpart. Ultimately, subjectivity rules over most of the decisions people make daily, and this applies to choosing a favorite fast-food restaurant. With the vast points of comparison, it can be overwhelming for an individual to make a simple decision on where to eat. It’s more important to simply pick 2 or 3 major value aspects about a restaurant and decide on those. In this case with Lotteria and McDonalds in the bus terminal area, the overarching conclusion averages out among the two. There is no objectively better restaurant and it boils down to personal preference. Whether someone is a local Korean citizen looking for a quick bite, or a tourist visiting Korea for a few months, everyone has personal tastes which is why it’s worth trying to throw different flavors at your tongue and seeing what sticks. Life is too short to limit yourself to one restaurant.

References Consumer, G. (2018, April 18). Which countries have the most McDonald’s? And where are the Golden Arches emerging? Retrieved from https://www.verdict.co.uk/countries-mostmcdonalds-expanding/ Lotteria. (n.d.-b). Philosophy. Retrieved May 6, 2020, from http://www.lotteria.com/eng/company/Philosophy.asp Lotteria. (n.d.-a). Lotteria Hamburger Menu. Retrieved May 6, 2020, from http://www.lotteria.com/eng/menu/MenuList.asp?C2=4 McDonalds. (n.d.-b). McDonald’s competitiveness. Retrieved May 6, 2020, from https://www.mcdonalds.co.kr/eng/story/competition/farmToRestaurant.do McDonalds. (n.d.-a). McDonalds Ala Carte & Value Meals. Retrieved May 6, 2020, from https://www.mcdelivery.co.kr/kr/browse/menu.html?daypartId=1&catId=11 NPR. (2008, March 23). McDonald’s Makes Fries Trans-Fat Free. Retrieved from https://www.npr.org/templates/story/story.php?storyId=90755759 Taylor, K. (2020, February 18). I compared McDonald’s to the biggest fast-food chain in Korea, and the “McDonald’s of Korea” has one major advantage. Retrieved from https://www.businessinsider.com/mcdonalds-vs-lotteria-the-mcdonalds-of-korea-2020-2 Wessh, J. (2019). The Service Concept of McDonald’s. Retrieved from https://www.grin.com/document/493809 YUtsas. (2009, December 31). Lotteria vs Mc Donald’s : Burger vs Burger. Retrieved from https://ccu-discovertheworld.blogspot.com/2009/12/lotteria-vs-mc-donalds-burger-vsburger.html Yu-Kyoung, K. (2016, October 18). Global fast-food chains too slow for evolving tastes. Retrieved from https://koreajoongangdaily.joins.com/news/article/article.aspx?aid=3023852

Appendix. Fast Food Survey Questions 1. How would you rate McDonalds’ food quality out of a 10? (1 being terrible and 10 being delicious) 2. How would you rate Lotteria’s food quality out of a 10? (1 being terrible and 10 being delicious) 3. How would you rate McDonalds’ service out of a 10? (1 being terrible and 10 being fantastic) 4. How would you rate Lotteria’s service out of a 10? (1 being terrible and 10 being fantastic) 5. How would you rate the facilities provided by McDonalds out of a 10? (1 being terrible and 10 being fantastic) 6. How would you rate the facilities provided by Lotteria out of a 10? (1 being terrible and 10 being fantastic) 7. How would you rate McDonalds’ cost of menu items out of a 10? (1 being super expensive and 10 being super cheap). 8. How would you rate Lotteria’s cost of menu items out of a 10? (1 being super expensive and 10 being super cheap). 9. How would you rate McDonalds’ convenience out of a 10? (1 being terrible and 10 being super convenient) 10. How would you rate Lotteria’s convenience out of a 10? (1 being terrible and 10 being super convenient) 11. How would you rate McDonalds’ cleanliness out of a 10? (1 being unsanitary and 10 being spotless) 12. How would you rate Lotteria’s cleanliness out of a 10? (1 being unsanitary and 10 being spotless)

13. Which of the two fast food restaurants do you prefer more? McDonalds or Lotteria?...