47037564 comparison of afc mcdonald

7/30/2019 47037564 Comparison of Afc MCDONALD

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Global Marketing project

Comparison of Fast Food Restaurants1


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Project by: Sir Shujja Prepared by: Umar yasin Rehaan Athar Arooj Riaz Hina Nawaz Ammara Mubashar

Submitted on: 5th July 2009 Pmas-University of Arid Agriculture Rawalpindi.

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McDonalds

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COMPANY DESCRIPTION

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Established in California during the 1940s by two brothers, the McDonalds restaurant became a popular teen hangout in the first flush of post-war affluence. To feed these youthful bodies, the brothers reduced the menu to the perennial favorites hamburgers, applied assembly line techniques to food production and expandedto four restaurants by 1953. Taking note of the brothers success, in 1955, Entrepreneur Ray Kroc bought the right to franchise the McDonalds System. Renamed theMcDonalds Corporation in 1960, Kroc focused his marketing effort on the family meal and children, spending heavily on television advertising which promoted the smiling clown face of its child-friendly brand mascot, Ronald McDonald. Today, the McDonalds franchise exceeds 30,000 restaurants globally and serves over 50 million people in more than 121 countries each day.

GOALS AND OBJECTIVES

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1. McDonalds vision is to be the worlds best quick service restaurants experience.2. McDonalds is committed to maintaining and developing the best food products

in the quick service restaurant market. 3. In order to deliver this, the companyhas made a number of commitments to food safety and nutrition. 4. Lead the Quick Service Restaurant market by a program of site development and profitable restaurant openings, and by attracting new customers. Increasing sales through promotions will enable them to continue their program of expansion.

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5. McDonalds have an objective to continual enhance and improve their menu. Thiswill better satisfy their customers and give customers more reason to visit. Many ideas for new items on the menu come from the franchisees responding to customer demand. 6. Consumer tastes change over time and McDonalds has to respond tothese changes.

MISSION STATEMENT"McDonald s vision is to be the world s best quick service restaurant experience. Being the best means providing outstanding quality, service, cleanliness, andvalue, so that we make every customer in every restaurant smile."

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COMPETITIVE ADVANTAGE

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McDonalds core competency is providing convenience when people need and want to eat fast food at prices that are competitive and provide best value for the customers money. One of McDonalds competitive advantages is its focus on consistency ofquality, production of food and use of raw materials all around the world. Theworld recognition associated with the brand McDonalds itself is also one of McDon

alds competitive advantages.

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Demand Trends

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There are many variations observed in the demand trends for McDonalds in Pakistan. The trend followed by the high income group is relatively stable and they comprise a very small percentage. The changes in the economy have very little effecton the demand trends of McDonalds that is being followed by this high income group. Other reasons for these variations are: McDonalds is a brand that is mostly perceived by an average Pakistani customer to be a place which is visited on someoccasion or once in a while. The main reason for this is the low disposable income that people have because of the inflation and some other unemployment reasons. On the other hand McDonalds lovers such as college students, working individuals, kids and families fond of spending a lot on fast food restaurants make it aplace to be visited very frequently. One of the reasons is high disposable income by blue collar individuals. Another reason is the attraction for McDonalds by kids as well as those who love it for every reason. There are also global issueswhich affect food demand for McDonalds e.g. bird flu and cow diseases in westerncountries brought down demand for McDonalds some years ago as it was a known factthat they get their meat from international suppliers in order to maintain quality.

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Key Success Factors

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McDonald s Pakistan has an aggressive plan to expand in all other cities of Pakistan and is rapidly growing with the focus to provide friendly and a quick service restaurant experience to its customers. There are many key success factors due to which McDonalds is successful in the market. We have been successful in identifying a few: All the franchises of McDonalds in Pakistan are owned by LaksonGroup of Companies. Apart from the fact that LGC is one of Pakistans biggest corporations, their management allows not only standardization of quality but a moreuniform and effective marketing strategies in order to sustain in the market. Therefore McDonalds being its part had to continue to strive to maintain its standards in the local region. Many McDonald s restaurants have included a playgroundfor children and advertising geared toward children, and some have been redesigned in a more natural style, with a particular emphasis on comfort: introducing lounge areas and fireplaces, and eliminating hard plastic chairs and tables. This has given a new outlook to the McDonalds as a quick service restaurant that is still not be seen on other fast food restaurants. McDonalds doesnt offer just burgers. Their well diversified menu is also one of the key success factors as most of McDonalds competitors are quite specialized: KFC in chicken, Pizza Hut in pizzas etc. When it comes to eating out during Ramadan in any fast food restauran

t, the name that clicks to the customers is McDonalds. The reason is the affordable deals that they offer, that seem to beat all others when it comes to prices.Another advantage that McDonalds has on its competitors is the location of its franchises.

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Its main advantage is that it is located in vicinity that is easily approachable. Secondly it has got in its surroundings other very attractive places to be visited by people who want to enjoy their life to the full. These places are a source of attraction not for the services they provide but for McDonalds as well. Forexample one of its outlets has been opened in Park Towers in Karachi so as to attract the shoppers who visit it very frequently. Another strategic location that McDonalds has acquired is at the Clifton beach. This has forced many others nearby restaurants and one of the very famous cuisine restaurants with the name ofKublai Khan to get closed. Same is the case in Rawalpindi/Islamabad where McDonalds holds an important strategic location. The customers that are driven to the Cinepax are automatically attracted towards McDonalds.

Product life Cycle Analysis

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In the Pakistani market McDonalds has been placed in the growth phase as it is still growing and has the potential to grow further. There are many strategies that have been employed in the other countries but are still to be made a part of the McDonalds franchises in8


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Pakistan. Following are some of the strategies that can be made a part of the Pakistani market so as to increase its market growth: a) McDonalds in Pakistan canintroduce breakfast in its menu to cater to the needs of those who are in a hurry to get to office in time. This will give them an edge on its competitors and its growth will increase. b) To gain advantage in the local market, McDonalds should introduce coffee at all the franchises. c) To maintain its brand image as a twenty four seven customer restaurant, McDonalds must make its timings more flexible to the needs of those who are usually very busy with their work schedules.

BCG Matrix

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According to BCG Matrix McDonalds is a star. The reason for this is its high market growth and high market share in the Pakistani market. On the other hand KFC and Pizza Hut are the cash cows because of9


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their low growth rate and high market share. During past some years KFC and Pizza Hut have lost their market growth because of the fact that they lost their standard war to their competitor i-e McDonalds. Another direct competitor of McDonalds is AFC. According to BCG Matrix it is question mark. Some of the reasons thatare responsible for its low market share and low market growth are the less expansion strategies being followed by the company. Secondly they are not focusing at all on all the major cities, rather they are only focused on the target segments of large cities.

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SWOT ANALYSISStrengths:

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McDonalds has been able to maintain its market share in the QSR market of Pakistan since 1998 and this is actually the major strength of McDonalds that has madeit so popular. Other major strengths are listed below:

Products:A major strength is the various deals that McDonalds offers so that it could bemade affordable. Recently McDonalds offered a deal for Rs.85 only, containing abeef burger along with a drink. McDonalds offers many flavors of Mcflurry ice cream from a mix of M&Ms to Oreo cookies. The M&Ms flavor was introduced about a year back and is still popular among the M&Ms lovers. McDonalds has also customizedits meal according to the tastes of Pakistan. People in Pakistan do not eat bacon so McDonalds does not offer such sort of meals in the country.

Brand Recognition:McDonalds has gained recognition worldwide. The chain is present all over the world in more than 122 countries. In Pakistan a large number of franchises are present, majority of them in Karachi and Lahore and McDonalds is regarded as a symbo

l of value and quality for your money.

Party celebrations:McDonalds offers its clients, especially children to celebrate their birthdays there. One can invite friends, they decorate the party area, various party games are organized along with face painting activity etc. Children are provided with an opportunity to celebrate their day in the way that they want.

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Partnership with Coca Cola:McDonalds and Coca Cola are official global partners. Coca cola is a big brand name serving people all over the world with beverages.

Partnership with telecom companies:McDonalds offered special deals to its clients with up size meals who are the users of a particular company such as Warid and Ufone.

WeaknessesProduct Variety:McDonalds needs to develop more and more products to stay in the competition. After the opening of international QSRs in Pakistan, many local QSRs have also been opened in various cities. The tastes are a bit different but they too are offering chicken and cheese burgers, drinks and fries at competitive prices. This situation requires McDonalds to be more innovative and price competitive.

More advertising:In Pakistan, McDonalds rarely advertises at TV, however billboards often show offjuicy McDonalds burgers but this could affect its popularity in future. It definitely needs to advertise more to reach the target and the potential customers.

Drive-Thru:

The service at McDonalds drive-thru has been subject to criticism all over the world and a lot of people complaint that the orders are either missing some of theitems or are entirely wrong. The service time at the drive- thru is also subject to great variations and needs to be improved.

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OpportunitiesReasonable Prices:McDonalds can broaden its market by offering meals at more competitive prices incomparison to other local QSRs such as AFC, Pappasallis etc. This way it couldget hold of the potential customers too.

Opportunity to be innovative:McDonalds could make itself more innovative by offering deals that appeal more to Pakistani consumers e-g it can introduce desi flavors in the present products such as Barbeque, Tandoori, Masala and other spicy tastes which are staple of thecountry.

Breakfast and special noon meals:Now in Pakistan most the trend of women going to work and opting for professionis increasing as a result of which they are running short of time to carry out all the home chores along with their work. McDonalds can offer deals to such market by catering them in the morning for breakfast. During the office hours peoplemostly go out for their lunch to restaurants. McDonalds can avail this potential market too.

Growing dinning out Market:In Pakistan the dining out trend is increasing especially in youngsters and uppe

r middle class. McDonalds has the opportunity to grasp this market quite well. It is already doing well by serving them but it could arrange various activitiesfor the people of this age.

Dine in Cafes:McDonalds can open up with small-sized cafes for the teenagers in their universities and colleges.

McCafes:McDonalds has opened coffee shops by the name of McCafes in UK. Pakistan can serve as a new potential market for these cafes.

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Threats:More health conscious customers:With increasing awareness about food and the importance of a balanced diet, people are opting for low calorie food e-g salads and food with high fiber content.To remain in the scope, McDonalds needs to serve this market as well as the present customers, this could be posed as a threat to McDonalds. Subway is offeringits low fat veggie and chicken sandwiches at prices almost the same as McDonalds. For McDonalds diet meals could be a way out of this situation. Until now, McDonalds in Pakistan has nothing to offer to health conscious customers.

Foreign as well as local competitors:In the growing market QSR market of Pakistan McDonalds competitors are enteringnot only from other countries but from within the country too. Their competitiveprices could be a reason due to which McDonalds can lose its share in the Pakistani market.

Changing customer styles:Pakistani culture has been changing for years now with new technologies and trends. People who are not brand loyal move with the changing times. Some competitorcan easily enter into the market and make better offers to its consumers by focusing on their needs and the satisfaction that they want. To remain competitive,McDonalds needs to be innovative and should change along with the Pakistani con

sumer styles.

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Al.Najam Fried Chicken

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INTRODUCTION

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The time was mid 90 s. Fast food companies were booming in Pakistan. Quality fast food in Pakistan was outrageously expensive and on a handful of families couldafford to go there. No middle class family could think of taking their childrento such big food chains. This was the time when AFCTm (Al-Najam Fried Chicken)opened its first restaurant at Saman Abad, Main Market in Lahore. Our goal and aim was very simple. To make the quality fast food available to all those peoplewho liked the fast food but couldn t dare to afford. We did so without compromising the highest standards of food industry. We AFCTm , not only use the best rawmaterials available but we also provide the best of food at a very reasonable and competitive price. All our foods are processed and prepared using of the artmachines and equipments. Alhamdulillah, with the grace of Allah Almighty, publicresponse was overwhelming. AFCTm became the fastest growing fast food chain inPakistan. At present time, AFCTm has more then twenty branches Nationwide including Mall Road, Railway Station, Allama Iqbal Town, Twonship,Mughal Pura, Defence, Thokar Niaz Baig, G.T Road, Wapda Town. It has also opened in Faisalabad , SGD, Abbotabad, Karachi, Gujranwala, Rawalpindi, Gujrat. Sahiwal Branch is ready tostart business. At least three more branches including Murree and Multan are inthe wings.

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At AFCTm , we work hard and work right. Our work force consist of very talentedand experienced personnel. These workers and team members are skillfully trainedto follow all hygienic procedures. Our disciplined staff is taught to respect its customers and to provide the fastest services. We are proud that we use frozen chicken, which is hygienic, healthy and safe. We ensure our patrons the freshness of food all the time every time when visit an AFCTm.

MISSION AND VISIONAFC better for people by ensuring healthy foods

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CORE VALUES TEAM WORK:

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We share responsibility and ownership of our decisions and action and trust oneanother in making shared decisions as a fear thought honest and open communication.

EXCELLENCE:We provide the highest standards of quality in everything we offer.

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INTEGRITY:We insist on an organizational environment consistently based upon the highest ethical standards.

RESPECT:we will show application and high regard for our associates partners and customers.

AFC BRANCHES

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Lahore(Head Office) Faisalabad Gujrat Rawalpindi Murree Abbotabad Sargodha Sahiwal Gujranwala Karachi

Multan18


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HIERARCHY

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Chairman

Trade Mark Owner

Trade Mark Owner

Finance Manager

Marketing Manager

H.R Manager

Branch Manager

Assistant Branch Manager

Low Level Employees

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SERVICESDine in. Take away. Free home delivery. Free Regular Drinks.

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Dine In:Dine in is the service provided by AFC. The customer who wants to enjoy their offered products in AFC they use to sit and enjoy the meal and exchange their ideas in AFC. This service gives opportunity to the customer to observe the environment and diversify their selves according to the environment. Like other fast foods AFC provide self service. Sitting arrangement is about 65 people. About 15 tables are available.

Take away:This service is also offered by AFC to those customers who have less time. Thesecustomers utilize the service by taking the meal with them like parties and trips etc. very busy persons who dont have time to spent on AFC they take meal withthem so they use their time properly on their work.

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Free Home Delivery:Free home delivery service is also provided by AFC. They received orders of customers on telephone and deliver the meal to the customer free of delivery cost. This service is to facilitate those customers who are not able to visit AFC personally due to many reasons. This facility is particularly to facilitate childrenand females. So this service gives opportunity to fulfill their hearted desiresfor AFC meal which always remain alive in their memories.

Free Regular Drinks:If cashier fails to give you receipt you are entitled to a free regular drink.

CHARITY PROGRAMS

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We have started a "Madrissa, Mosque and a Hospital" at "Multan Road Phool Nagar"where there is no proper arrangement of medicine, hospital and clinics people have to go to other cities for treatments and many of them expires in the way sowe started the Free Hospital to help those people.

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Hospital:Round the clock active care Patients are frequently and timely visited throughout the day by the medical staff, and through the night too if needed. Hospital management The staff works by a system which has been by professionals to preventerror and provide the best of care and satisfaction possible. We try harder every day, and every small incident of mismanagement is taken seriously. The smallest of complaints are also taken care of with top priority. Our aim is that each patient should be catered to like a family member and not taken as a routine client. Night Duty The night staff is not allowed to sleep and is compensated for the full 12 hours of the duty. The medical staff is highly paid to provide them anincentive to stay at Hospital. They are also given bonuses based on their individual performances every month.

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SWOT ANALYSIS

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AFC has the privilege of being the only fast food hotel boasting of national quality standards until recently, till the arrival of new fast foods in Pakistan. It has been exploiting its strengths and opportunities quite efficiently and hasalways tried to turn the weaknesses and opportunities in its favor. An analysisof its strengths, weaknesses, opportunities and threats as perceived by us is asfollows:

Strengths:o o o o Convenient location. Hospitable treatment to customers High quality food. Low price food as compared to other fast foods.

Weaknesses:o Lower motivation o Lack of training. o Lack of performance oriented promotions. o National level /Limited customers

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Opportunities:o More incentives for outstanding staff to retain them as it is difficult to find well trained staff. o Specialty restaurant should be introduced to give a wider variety of services.

Threats:o New restaurants in Islamabad providing comfort to the people with a traditional outlook. o Fast foods like McDonalds and KFC there is lot of competition prevailing in market regarding this business.

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Statistical Analysis

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We have distributed 150 questionnaires to the public among them 50 were being distributed in our institute while remaining 100 were distributed in residential areas of Rawalpindi and Islamabad. The result is a below along with graphs.

1. McDonald has more taste than AFC. Strongly agree Neutral Disagree agree 97% 2% 1% 0

Strongly Disagree 0

97%

` 0% Strongly agree agree neutral Disagree Strongly Disagree 0% 1% 2%

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2. McDonald has good quality food than AFC Strongly agree Neutral Disagree agree98% 2% 0 0

Strongly Disagree 0

98%

` 0% Strongly agree agree neutral Disagree Strongly Disagree 0% 2% 0%

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3. McDonald has more meals than AFC according to customer needs. Strongly agree99% agree 0 neutral 1% Disagree 0 Strongly Disagree 0

99%

0% 0% 0% 1%

` Strongly agree agree neutral Disagree Strongly Disagree

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4. McDonald company has attractive brand name than AFC Strongly agree 96% agree0 neutral 4% Disagree 0 Strongly Disagree 0

96% 0% `

0% 0% Strongly agree agree neutral Disagree Strongly Disagree

4%

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5. McDonald company charges reasonable prices than AFC. Strongly agree neutral Disagree Strongly agree Disagree 0 10% 0 80% 10%

10%

0%

10%

0%

`

Strongly agree agree neutral Disagree Strongly Disagree

80%

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6.McDonald company does not change the quality of product with change in price as compared to AFC. Strongly agree neutral Disagree Strongly agree Disagree 92% 00 8% 0

92%

` 0% 0% 0% 8% Strongly agree agree neutral Disagree Strongly Disagree

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7. McDonald company provides more incentives and sponsorship for customer than AFC Strongly agree neutral Disagree Strongly agree Disagree 0 30% 5% 65% 0

65%

0% 0%

`

30%


5%

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8. McDonald company has more sale discounts/sales offers as compared to AFC. Strongly agree neutral Disagree Strongly agree Disagree 0 1% 8% 91% 0%

91%

`

1% 8%


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9.McDonald company has more creative advertisement than AFC. Strongly agree neutral Disagree Strongly agree Disagree 94% 6% 0 0 0

94%

0%

`

0% 0%

6% Strongly agree agree neutral Disagree Strongly Disagree

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10.McDonald company advertises more on media than AFC. Strongly agree neutral Disagree Strongly agree Disagree 0 0 80% 20% 0

80% 0% 0% 0%

`

20%


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11. McDonald have more attractive packaging than AFC. Strongly agree neutral Disagree Strongly agree Disagree 90% 10% 0 0 0

90%

` 0% 0% 10% Strongly agree agree neutral Disagree Strongly Disagree 0%

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12. McDonald company have more market share as compared to AFC. Strongly agree neutral Disagree Strongly agree Disagree 70% 0 30% 0 0

70%

` 0% 0% 0%

30%


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13. McDonald are easily available in market as compared to AFC. Strongly agree neutral Disagree Strongly agree Disagree 33% 67% 0 0 0

67%

` 0% 33% 0% 0% Strongly agree agree neutral Disagree Strongly Disagree

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14. McDonald distributors work well as compared to AFC. Strongly agree neutral Disagree Strongly agree Disagree 95% 5% 0 0 0

95% 0% ` 0% 0% Strongly agree agree neutral Disagree Strongly Disagree 5%

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15. Do you think AFC will be completely out of market in future? Strongly agreeneutral Disagree Strongly agree Disagree 0 52% 8% 40% 0

8% 52% ` 40%


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Analysis and RecommendationsFrom the above survey conducted on two fast food restaurants one of them was local and the other was international, we have reached towards a conclusion that:

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People mostly prefer international restaurants as it has good quality food, friendly environment and reasonable charges. From the above survey we do identify that local fast food restaurant is far behind than international, reason behind that it has low quality food and short menu. Although it offers relatively low prices and some discount offers but still it hasnt captured that market share as compare to McDonald in Pakistan.

McDonalds has variety of meals as compared to Afc. It provides large range of burgers, fries, international meals salads and ice cream. On the other hand Afc has limited variety of burgers and fries .According to our survey, public want large variety of meals in every restaurant therefore they prefer McDonald over Afc.

Customers usually prefer brand names when choosing any restaurant therefore McDonalds is also enjoying its high market share due to brand name in Pakistan.40


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It is a very common practice that quality of product diminish with a decrease inthe price but according to our survey 92% of the public confided that McDonaldhas never compromised on their quality even though when it has decreased its prices.

Our result shows that people are more satisfied with the discounts and promotions offered by afc. Another tool for capturing the market is attractive advertisements and McDonalds is also given preference by customers due to its advertisementsas compare to Afc.

McDonalds is easily available all over Pakistan. It has opened numerous branchesas compare to Afc. Afc has limited no. of branches in Pakistan therefore easy and quick access is also a major factor of preference of McDonalds over Afc.

Afc is successfully fulfilling customer demand but it cannot compete McDonalds therefore heavy investment is still needed by Afc to stay in market otherwise itmight be out of market in near future.

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References www.google.com www.afc.com.pk www.mcdonalds.com

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47037564 comparison of afc mcdonald

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