Summary

Concepts:

market, competition, McCaf?meals, customers, service restaurant, environment, consumers, food, market research, coffee, business, trends, life, caf?B>

Summary:

Keeping ahead involves continuous hard work to enhance the reputation of the brand, coupled with product innovation based on detailed market research that indicates how to please customers.

This case study examines the positive way in which McDonald's is responding to changing customer habits and increased levels of competition.

Today, many people live busy lives and place great importance on convenience when buying and paying for goods and sevices. They are attracted by modern, quick service products such as drive-in car washes, mobile phones and ready meals.

For many people (though not all), this emphasis on instant service is a winning formula, particularly for younger people and young families.

However, research indicates that modern consumers of all ages are seeking experiences that are more individualised than in the past.

All organisations need to be in touch with their business environment in order to make sure that what they do fits with customer expectations.

In terms of the product life cycle, quick service restaurants have reached maturity in the UK and need an injection of fresh life through innovative ideas if their lifespan is to be prolonged.

McDonald's is looking to provide appropriate solutions to these changing trends. In particular:

• consumers are seeking more food variety and healthier eating -McDonald's is providing a more balanced offering that includes fruit, sugar-free fruit drinks for children and more chicken products

• price is becoming more critical to decision-making - McDonald's has created an Extra Value Meal and a McChoice menu offering a flexible combination of drinks, sandwiches etc in addition to the meal, thereby providing excellent value for money.

McCaf?provides an avenue for McDonald's to target these consumers by offering high quality coffee served by specially trained caf?staff in a caf?style environment.

Learning outcomes:

As a result of carefully reading this case study, students should be able to:

• know that the Quick Service Restaurant sector is a mature market facing competition from several rival offerings e.g. take-away food and supermarket ready meals

• appreciate the contribution of market research to product development

• understand some of the key consumer trends affecting the market for informal eating out (IEO)

• explain how competitive strategies are required to gain competitive advantage

• describe some of McDonald's recent competitive strategies e.g. chicken deals, McChoice menus, and the McCaf?concept

• outline the key strengths of the McCaf?concept.