McDonald & Burger King’ rivalries in advertising

A savage advertising war 

This war is dated from 27 year ago a,d already the two giants of the Fast Food industry didn’t show any mercy to one another.  Both giants from the fast food industry fight for years to attract a maximum of customers in theirs restaurants. And advertising is one of their favorite play ground to challenge themselves and tool to drive traffic to their restaurants. We will look here divers campaigns that both brands made and which had a certain impact on the audience or not. Besides we will focus and highlight on the work that they made in the American and French markets.

This commercial, here bellow, from Burger King clearly is an aggressive example of what both firms fight. Actually, this television ad was on the screens in 1986 of all Americans.

This second commercial which was realized in 2002 on the German market, is a ad from Burger King show us the famous icon of the GoldenArches buying secretly a burger at his competitor restaurant.

In their recent advertising campaign, the number two in the fast food industry have been incorporated famous personages and celebrities in their commercials  in there re-branding strategies in order to promote their new  healthily menus including salads and smoothies. So, the corporation broadcast a series of quirky commercials featuring well known people. And  the message was that if you want to be as sexy as those celebrities; you can eat healthier even in Burger King. In fact,  eating fruits and vegetables is none only possible in a fast food but they should take example to them. With the gimmick « Come on and get it !». We can notices here that the company did not use their mascot but common people. Just like their main competitor, Burger King is not longer the one in the middle of the attention but the client.

Actresses such as Salma Hayek, footballer like David Beckham, the singer Mary J. Blige and so on had signed for the the titans of burgers. If you want to have a clear idea of what  they did you can just check out and click here bellow to ones of those videos.

As regards McDonalds in France, we can first underline the change of color of the logo. Indeed, the brand switch from a red background to a green one. This change of color symbolize the re-branding strategy that the company had taken. In fact, McDonald express this way that he is concern about sustainability. Besides, the corporation has a Youtube channel that is full of videos that explain how the brand is involve in different sustainable programs such as fair-trade.  Another way for the brand to promote their work and efforts. But also to show to their customers that they are also concerns about serious issues that the world have to face. Furthermore, the brand position themselves as an actor of diversity. From their ads for young people looking to learn how to become a manager and expand their job opportunities. To the recent advertising campaign: « Venez comme vows êtes » which promoted diversity with a fun touch.

The following McDonald’s commercial dated from 2012 and was aim for the French market. This famous advertising campaign was named « Venez comme vows êtes » – «  Come as you are » was one of the most interesting video campaign that the brand lately since the corporation here place the customers on the center of all attention. Plus, we can see how going to one of the brand’s restaurant is a festive experience among all people from different range of age.  Therefore, this campaign came out during a strategic  period since the all country was absorb with a very debate subject: the question about gay marriage. So in a very subtle way McDonald answer to the question. Anyone is welcome to there restaurant and they don’t have to feel ashamed, they will always be warmly welcome and serve. A great story that was made to attract but also engage customers.

Besides, this type of campaign are powerful weapons which help to fight back bad publicity about the fast food chain. Since the fast food industry is in the hearth of painful battle which point their business practices. The popular films, Super size me is one of this bad publicity that paint McDonald in a poor even ugly  light.

Here bellow you will be able to have a look to the McDonald’s commercial for the French Canadian market in 2011. The campaign was called « Souvenirs d’enfance » meaning « Childhood memories » and had have to trigger emotions and memories from childhood. But also to reminds us that McDonald have been in our lives for years now and it will still. Moreover, trough such commercial the brand redefine their archetype as a friend who always been present during the evolution of their customers lives at divers stage.

Plus, both ads we can clearly read the brand mantra and their aim to be involve in their customers existence. Even though, the golden arches adapts their advertising campaigns according to the country that aim, we can underline the fact that the brand tend to promote an experience instead of their products. A strategic direction which has the purpose to bring emotions. Thereby, they put their clients in the center of the attention by telling them that they made the brand.  Customers are almost the heroes of the brand’s story.

In term of advertising, we can ignore the risky path that Burger King had took few years ago the United States. In fact, the brand used quirky images under the seduction archetype to promote theirs product. More edgy and sexually oriented this marketing strategy was not the most successful.  Here are some examples of what the brand did. Obviously it is impossible to ignore such campaign even though the advertising campaign was judge inappropriate and was he subject of many debates.  And was a failure for the corporation, theses prints make people react and actually talk about the brand.

More recently actually this year,  the corporation organize a viral campaign which have the goal to make people think that the brand had change their name. In fact, a large campaign which have the purpose to introduce to the public eyes the new low fat french fries. A new product which confirm the brand aim to create wealthier menus.  Fries King was the name the corporation used to trick everyone. In addition, this new product can bee seen too as product which will fight back the success of McDonald’s french fries. Unfortunately, the campaign went viral but was not really appreciate by customers as we can see here bellow.

The issue of this failure is also that the brand took a hashtag that already stand for something else. An commonly use expression. We can conclude here that despite Burger King’s risky actions they succeed somehow to make people talk about the brand. Positively or not but at least they gain interest from customers. Can we say here the common expression which say that there is not bad publicity?  Well, the brand definitely always bring content that catch people attention but they should be more careful because those type of gaffe can simply just annoyed in the long run.

 

 

 

In the other hand, McDonald still spend a lot on advertising. In fact, they create creative content which play with various emotions. But also show that the brand is almost a distant member of their family just like a friend. While Burger King is more daring. Indeed, the fast food corporation act on making their customers laugh or shock them.

Marvy Lungyeki

Sources:

http://www.forbes.com/sites/caroltice/2013/09/26/what-burger-king-got-wrong-with-low-fat-french-fry/

http://business.time.com/2013/10/02/the-web-hates-burger-kings-fake-name-change/

Social Media Strategies

McDonalds’s

McDonald’s is certainly one of the most recognizable brands around the world. And it’s always been a leader in the fast food industry. The brand has a strong social media strategy to communicate with fans and build a active image. Here is a quick look at how McDonald’s play with different social networks.

Facebook

The McDonald’s US fan page has nearly 30 millions fans and France fan page has more than 1 million fans. It’s other local market pages also attracted several hundred thousand likes.

The brand post relatively frequent and each post always attract thousands likes. That shows that McDonald’s is one of the most liked brands on Facebook. Unlike most of the brands, McDonald’s post not only product promotions, but also interesting social style photos related to the brand and social activities to help children. This is a smart way to show that it concerns people and the world instead of just concentrating on the brand.

For the fan page France, McDonald’s is more concentrate in the promotion of products. But at the same time, they also post some news regarding the new films and art activities which tends to be more attractive for French people. The brand really use the same strategy to adapt national needs and interests to bring more customers. On the Facebook pages, McDonald’s makes no apparent efforts to respond to comments it receives which is a field to improve.

 

Twitter

On contrary to its Facebook page, McDonald’s makes more efforts to keep interactive on Twitter. The brand is also more active on Twitter with several posts each day to share with nearly 2 millions fans.

The posts on Twitter are mainly product promotions and events that were held by McDonald’s. It also uses hashtags to create buzz and events. The team  makes efforts to respond to followers. It responds about 20 to 30 followers per day, but based on the comments it has, the brand can be more interactive with customers. The brand has the same strategy to have local Twitter account, but they less active than the US account.

Pinterest

On Pinterest, McDonald’s only has one main account while it has separate accounts for its local markets on Facebook and Twitter. Most of the contents is pinned from the brand’s websites. It has more than 500 hundreds images and 18 boards.

McDonald’s tries to invite users to pin related photos to the board. It’s a good way to make people feel involved and an opportunity to build a community. But McDonald’s didn’t use Pinterest to hold contest like many other brands did. It could be a good way to increase engagement and interactivity with followers.

Instagram

McDonald’s has also different accounts for national markets on Instagram. The USA account has 77 thousands followers but only 66 images which is not a big amount. Instagram is a simple and effective place to share photos and videos. On Instagram, the brand posts mostly related life style images and videos which is correspond the use of Instagram. But McDonald’s should take more advantage of this popular social network and be more interactive with followers.

One thing need to mention is the fact that, on Instagram, the brand receive more negative comments than other social networks. Sometimes the comments are really offensive. But the brand didn’t do any responses for this. This is very dangerous for brand image and makes no added value for being present on this social network.

 

 

 

 

Burger King

Regarding Burger King’s social medias strategy, we will focus on the US market since it is their first market and that the brand is not yet presents in France.So, we will analyze here the strategy of the corporation in the main current social media’s platforms. Actually, this path was taken just  when Russ Klein took the position of President of Global Marketing, Strategy, and Innovation at Burger King Corporation in 2003. It was a difficult time for the company. In fact, with profits and sales decreasing and franchisees unhappy, he had to take some drastic actions in order to redefine the brand’s perception. Indeed, the BURGER KING brand had lost their popularity since  the vast majority of consumers were aware of the Burger King brand but no longer found it interesting.

 So, Klein’s mission was to rejuvenate the Burger King brand and rebuild relevance to the consumer. What followed was a series of strategic decisions and innovative even risky marketing campaigns that would give freshness to the brand image. Instead of traditional advertising, the company created Burger King related content intended to entertain consumers, give the brand social currency and also create a sense of mystery. The firm chose then an inexpensive non-traditional media channels such as internet micro-sites and social networking sites to reach target consumers. Many of the innovative marketing tactics used by Burger King relied on interactive and digital media channels. The most talked about of these initiatives was a website called: The Subservient Chicken. Here is the link to the mini-website : http://www.subservientchicken.com/pre_bk_skinned.swf

This website became an internet phenomenon, attracting hundreds of millions of visitors and winning various awards for its ingenuity as a viral marketing campaign. BK went on to establish highly trafficked Burger King branded MySpace pages, special programs where users could create their own Burger King( as you can read on the « community » post)  ads online, and other non-traditional marketing programs. The Subservient Chicken campaign was quickly proclaimed a success, based on critical acclaim from advertising critics as well as significant traffic to the website. In early 2006, Burger King was known as an innovator in content driven marketing and for their creative use of social media thanks to such campaign.

We will know study the presence of the 2nd major actor of the fast food industry.

 

Burger King’s Twitter account hack.

Of course, just like their main competitors, Burger King has a Twitter account which helps the brand to convey all of their news in terms of products, promotion or campaigns. Therefore, the company recently was been the victim of a misadventure. Indeed, the fast food company’s avatar was changed and name to “McDonalds” and sent a McFlurry of questionable and offensive tweets. This accident was not all bad news for Burger King since the account added 5,000 new followers in the first 30 minutes of the hackers took over. Surprisingly, this accident was a major buzz and fun-filled many followers.

This is the official Twitter’s account page of the fast food:

And here is the page was hacked:

And we can read here ones of the most funniest tweets from this misadventure:

The info-graphic here bellow describes pretty well how the brand handle the problem but especially what are the astonishing results of this mishap:

 

Regarding Burger King presence on Facebook, we can underline here the fact that the brand detains less “likes” than the french Facebook’s page of Mcdonald. Actually, this screen shoot here above is the U.S Burger King’s Facebook fans page. On Facebook, the number two on the fast food industry has a page for each of his markets and implements difference types of campaign in order to entertained their fans and affecionados. Plus, on this platform, the brand regularly posts pictures of new products or current promotions.

As regards, the brand Instagram activities, we can see thanks to both screen shoots place above that Burger King has two distinct Instagram’s accounts. The first one, is the one is dedicate to sale promotions and the second is completely reserve to the customers. In fact, on this account the followers can tag their own pictures in orders to win free burgers.

On this platform, the clients are put in the center of a attention and are the ones who leads the account really. Actually, they have to prove through their pictures their love to the brand but also that in each Burger King’s restaurants : “TASTE IS KING”. Furthermore, this a easy way to gain a larger fans community and also bring value to their clients while  they are enjoying themselves. However, the brand detains also others accounts for the others countries where they are implemented.

When it comes to Pinterest, the fast food firm also has an account for their main market like the U.S or the United Kingdom.Concerning the American’s account, Burger King in this platform aim to show their products but also to put on the front once again their clients like with their #tender moments hastag. This content sharing service allows the brand to have another fun virtual experience and relationship with all of their customers.

Authors: Viriginie Mialon, Bingying Zhang, Marvy Lungyeki, Maya Al Chaarani, Sandra Essafi

Sources:

http://business.time.com/2013/10/02/the-web-hates-burger-kings-fake-name-change/

http://mashable.com/2009/02/06/social-media-smartest-brands/

http://mashable.com/2013/02/18/reactions-to-burger-king-twitter-hacked/

http://mashable.com/2013/02/18/burger-king-twitter-account-hacked/

http://mashable.com/2013/02/18/burger-king-twitter-account-hacked/

http://www.forbes.com/sites/caroltice/2013/09/26/what-burger-king-got-wrong-with-low-fat-french-fry/

Click to access 6-0025.pdf

Brand Community

The Mcdonalds’ Community

Mcdonalds creates a community all around the world by using Gamification and crowdsourcing in order to involve its customers. The goal is to create a buzz around the brand and to let people feel part of the “team McDonalds”.

Some examples:

–        In America: Fans were asked to do a video for the launch of the new product“Fish mac Bites” in which they had to promote the product in animation and music. This create a community around the brand because people gather themselves to create it and win. Winners were rewards with money (the jackpot was 40,000 $)   http://tongal.com/work/71agq3

 

–        In Canada: McDonalds offer to its customers a gamification: Candidates has to create a little story by introducing characters that embodies McDonald’s product. The winner will be reward by: a private movie screening for him and his friends and of course recognition.  

–        In Germany: the first crowdsourced burger; the rule are simple: people were asked to prepare their own burger. On It technology they were able to create their own recipe. The challenge was not only to have a new burger idea but also to share this idea with other, to communicate this new recipe, to do its promotion. The winner will be the person whom collected the most of vote.

http://vimeo.com/40618555 

 

 

The Burger King’s Community

In France: When Burger king announced its come back a community of French fans was created naturally. This people decided to create some Facebook pages to exchange their impressions about this return and share their joy.

Before, this comeback, French Fans already set up a community with a petition and Facebook pages to claim the return of the king!

–        In Norvege: They launched an application called Whopper Sellout, the goal is to test the loyalty of Burger King’s customers. In fact, fans have 2 possibilities : 1)     Confirm that they are real fan of the brand by clicking on the thumb 2)     Express they preference for McDonalds and click on the BigMac. Those whom clicked on the Big Mac were erased from the Burger King Facebook fan page. This allows the company to create a real and loyal community and after all create a buzz around the brand.

Authors: Viriginie Mialon, Bingying Zhang, Marvy Lungyeki, Maya Al Chaarani, Sandra Essafi

Burger King regional mobile app

This is a regional mobile app launched by Burger King, this app allows Burger King lovers to view the menu, find the nearest Burger King, stay tuned with the latest offers and promotions and finally most important to order from mobile.

This app includes:

Mobile commerce: We can use this app to achieve online order.

Mobile advertising: The app updates frequently with new products and activities of BK.

Interactivity: This app provides also the navigation which we can always find the nearest BK restaurant.

Brans objectives:

With more and more mobile users, what most of the companies did was to develop mobile commerce to increase sales. For a retailer like Burger King, it can be very effective way to create possibility for consumers to order via mobile. Consumers can take time to look through products with details instead of feeling a lot of pressure when making a phone call to order. Consumers can purchase via mobile whenever and wherever they want.

Within this app, Burger King always updates with new products and activities. When consumers open the app, it’s the main page they’ll see. This kind of mobile advertising is very effective and the brand can show consumers that they make efforts to meet their needs. This way Burger King may want to develop consumer loyalty by letting them know more about the brand.

The navigation to find the nearest Burger King restaurant is also another way to facilitate and attract people keep coming to the restaurant.

For this app, the majority of end users are those who use the app to order. On the other hand, they also can be the ones who try to find the nearest restaurant via the app.

The ranking and rating in App store are two KPIs that are very representative. We can know also the usage numbers from download times. They are directly from users. Other possible KPI could obtain from the restaurant: orders are taken via the app. We can also measure form monthly active users or daily active users who are your key users. We need to learn everything about this cohort and how they’re using your app so you can create a more engaging app and convert more users into active users.

But comparing other fast food brands’ app like McDonalds and KFC. Burger king has a lot of improvement to make. It can add online delivery for certain country like others do and provide special offers for mobile users.

Bingying Zhang

McDonalds and new devices

McDonalds proceed in changes over the years in order to satisfy its consumers: a new logo was designed, the drive-thru see the light in 1975, the company started a new approach by installing seats in their restaurants…The biggest innovation was in 1996 when the company launched http://www.mcdonalds.com : the firm is offering its website to a large number of country in which it is located. In France, McDonalds launched http://www.mcdonalds.fr and adapted this website to mobile version. In addition, the company go further to satisfy customers’ needs in creating a mobile application.

McDonald’s application allows customers to order directly on their smartphone by creating an account first and pay it online, thus we can talk about M-Commerce solution. Furthermore, the goal is to make people come to a McDonald’s restaurant, we can talk about use of Mobile to Store tool. Information about the client are required while opening the account: email address, name, surname, date of birth and favorite restaurant. By collecting theses information McDonalds can improve its CRM. It is also a mobile content delivery strategy because customers can find the nearest McDonalds restaurant thank to the GPS location, scan products, see menu and actuality of McDonalds (new product, promotion, advertising campaign), create a wish list according to what they want to eat the next time and they can also find on the application movies selected by McDonalds in the closest movie theater.

Through the application, McDonalds give permanent access to its portfolio and offers‐products and establish a durable loyalty relation with its consumers.

The objectives of the brand

McDonald’s is broadly popular to everyone as a fast food brand which has been presenting its “M” logo all over the world with the very high brand recognition. However, although the presence of McDonald’s is highly dense in many big cities over the world, problems remains problematic to both McDonald’s and its customers. We identified those following problems:

• Long queue and long waiting time
• Slow counter services make customer wait at counter desk for orders after waiting in line
• Not enough cashiers are opened
• sold-out/unavailability of food items,
• quick and inconvenient order making under pressure of salesperson and other customers in line: make them ordering quickly
• For big group of customers coming to the store: time and crowd pressure while ordering even increases and not all of them have a chance to see thoroughly the menu and consider carefully their orders, time of waiting increases proportionately with the number of people

McDonalds’ objective is to combat those problems in order to maintain the advantages and comfort of a fast-food brand, McDonald’s think of an innovative solution to maximize the convenience, quickness and quality of the service and products and bring back as many values and benefits as possible to the customers. Therefore, the concept of a new innovative application coming up seems to be a perfect solution to the situation.

Who is the end user target?

Generally speaking the end user target is young adults, aged from 18 to 35 years old. They own a smartphone with internet access and/or a computer so as to enjoy the application online service. They are already McDonald’s customers and they live in city.

However, the core target are professional workers, aged from 26 to 35 years old, with a middle income. They don’t have much time during their lunch break (around 45 minutes), so they have to be very quick and they don’t want to waste their time queuing. The fact they are constantly under time pressure, this application really fits to their needs, because they could order their meal from their smartphone while they are waiting for the elevator for example and then go directly to the nearest McDonald’s and take its order. So, they will not waste 15 minutes and sometimes even more in the queue.

The secondary target is students, aged 18 to 25 years. They represent the most important penetration rate among McDonald’s customers. They can order during their lunch break or after school.

What are the expected results?

McDonalds is expected a proximity with its customers thanks to this convenience service: whenever the customers want and wherever they are, they can order McDonald’s products. It could be in the transportation, in an elevator, in the working office or while they are walking, just with a few clicks, they could order the products they want. In this way, McDonalds insure facility and simplicity during the purchase of orders.

There is no time wasting in queuing at the restaurant because the order is already registered and employees can anticipate order so this will lead to a better performance in the restaurant.

Customers have an overview of products availability and they make order without pressure from the salesperson and the customers isn’t disappointed from the unavailability of the product he wanted to buy.

Author: Sandra Essafi

Editor: Maya Al Chaarani

Are Burger King and McDonald Lovemarks?

    First of all, you are probably wandering what is a Lovemarks.

Well, a Lovemarks is a marketing concept that is intended to replace the idea of brands in the long run. The idea was generated by Kevin Roberts, the Corporate Executive Officer of the well known advertising agency Saatchi & Saatchi. Who besides detailed the concept  in a book of the same name: The future beyond brands : Lovemarks (2004). In the book Roberts claims, “Brands are running out of juice“. Actually, he considers that love is what is needed to rescue brands. He asks, “What builds Loyalty that goes Beyond Reason? What makes a truly great love stand out?” . A concept which can be related with the new form, tools and concept of marketing, meaning crowdsourcing, marketing responsible or 3.0 and also with the co-branding with customers. A concept which explain how brads can become more that just a tag name. How marketers can create relationships with their customers by involving them and raising emotions. Indeed, a love brand is a brand which is able to reach the heart and the brain of consumers in the same time.

With the aim to discover if Burger King was or not a Lovemark, we conduct the test on 88 subjects. We can read here bellow the details of this study.

R-E-S-P-E-C-T

Performance:  Quality and innovation are the strongest characteristic of Burger King in term of performance.

Trust:  Security and ease scored hight in this area. However, the brand does not appear to be sustainable and open enough.  Even though she is reliable.

Reputation:  This part is the one in term of respect which is the lower. In fact, the people who take this test seems to think that the fast food is efficient but lack of leadership.

 

L-O-V-E

Mystery: This part of the Lovemarker is the one which have the highest score. In fact, Burger King is a brand which inspire people regarding our sampling of study . Moreover, The myths and icons on which the brand is built seems to be clear to the customers.Therefore, the brand do not make them dream or feels nostalgic.

Sensuality: In term of sensuality the Burger King scored poorly even though the smell and touch are appealing. Some how, people are not enough touch trough their senses. Which is a shame for a restaurant.

Intimacy: And it is worst when it come to intimacy. Actually, people doesn’t feel so connected with the brand.

To conclude, Burger King is indeed a Lovemark since the fest food chain have the respect and the love from his customers. Nonetheless, the brand identity and the emotional part of the brand need to be more deeper. Actually, they have to work on the LOVE part  and more precisely the mystery and sensuality aspects. But in the other hand the RESPECT part is strongly represented and show the trust that the clients have for the brand.

Source: http://www.lovemarks.com/index.php?pageID=20015&lovemarkid=309

This is a screen shot from the website lovemarks.com which, clearly show us that indeed the brand is considered as lovemark with more than 41 point. Actually, the fast-food restaurant score here 88 points. Regarding, Lovemarks.com, is a place for promoting and perpetuating awareness of Lovemarks around the globe and creating emotional connections with consumers by allowing them to share their Lovemark stories. Lovemarks are the future beyond brands, in fact they are those brands that customers respect and end up loving. Because, they deliver beyond their expectations of great performance. In definition, a Lovemarks have to reach their heart as well as their mind, creating an intimate and  emotional connection that they can’t live without.
Author: Marvy Lungyeki

Editor: Bingying Zhang
Editor:Viriginie Mialon

In order to know if McDonalds is a Lovemark we decided to administrate this study towards 85 person. The results show that the brand is a Lovemark with an average of 41 points. Below the detail of this analyze:

– Performance: The average is about 7,5/10. What greatly influence the result is the innovation and the identity of the brand which are highly scored.
– Trust: The average is about 7/10. Most of people think that it is easy to reach the brand because it is an open and easy brand, nethertheless, we can noticed a kind of skepticism regarding the security. People don’t always feel secure regarding the way Mcdonald’s product are made.
– Reputation: The average is about 5,5/8. For a lot of the people we interviewed the brand is leader in its sector. It can however increase it share of responsability towards the quality of the brand.
– Mystery: The average is about 7/10. Mcdonalds is viewed as a mysteric brand with a strong history. But unlike some of its competitors (eg Burger King) the mystification and the dream are less impacting.
– Sensuality: The average is about 9/10. This results show that the customer’s experience is almost perfect. The client recognizes that he had a specific experience when he is in a McDonalds’ restaurant.
– Intimacy: The average is about 5/6. McDonalds has its own community with client whose follow the brand and its trends. A real passion appears.

In conclusion, McDonalds has the two characterics of a lovemark (Respect + Love) but few progress still have to be made in order to attrack more and more fans.

This is a screen shot from the website love marks.com. The fast food restaurant scored 163 point which is huge McDonalds is a love mark. A lot of customers respect it and love it and a lot of good expectations are delivered. Nevertheless, even if a lot of customers seem to love the brand, the website scored 211of lose it which is higher than the points according to the love it part. In fact, this site is american and we can see how interesting is the differences between reaction of people toward their emotion and intimacy to the brand. It seems that mcdonalds has a lower good image in other countries specially countries in which we can found burger king.It is a controversial brand : this is due to the fact that Mcdonalds is more perceived like junk food than quality food.Burger king really communicate on the quality of their product unlike McDonalds.
McDonalds is trying to reach easy targets [children for example] in the expense of other important point in conclusion, Mcdonalds should reconsider its strategy of love mark specially when their are competing with other fast food like burger king.

Author: Sandra Essafi
Editor: Maya Al Chaarani

Keller’s Brand Equity Pyramid

We chose to make a questionnaire about Fast food and more particularly about McDonalds and Burger king in order to report experiences and opinions of people towards this two brands.

Here is the questionnaire’s link:

https://docs.google.com/forms/d/1P1YUoRhBeu_NTILUZvtUC_kDajEZ65XLFe7cbkTD6tc/viewform

We started the questionnaire with questions that are related to habits of consumption for example: “How many time per year do you eat in a fast food?” or “How much do you spend each time you go to a fast food restaurant?”

Thanks to those kind of questions we were able to construct a profile of McDonald’s customers. The result we had about burger king wasn’t efficient enough to dress a profile. In fact, we administrated questionnaires in France and more precisely in Paris where there is no Burger King restaurant yet so results about people who chose burger king over McDonalds are distorted.

Profile of McDonalds consumers: they go to McDonalds at least once a month (72.2%), they go to the restaurant for most of them with friends (80%), they prefer to eat McDonalds food during the evening ( 45% ), they spent around 5 to 10 euro and stay there for about an hour.

For McDonalds we discover that the 3 mains criteria that bring people to this fast food are:

1) Choice of products : 36,4%

2) Location/quality : 27,3%

3) Price : 9,1%

The reasons that drive people to McDonalds are:

1) Practical aspects: 45,5%

2) Low price: 43,6%

3) Fast service: 36,4%

4) Taste: 29,1%

5) Experience: 9,1%

The second part of our questionnaire was based on the experience of customers in restaurant: those questions allow us to dress an elusive consumer study:

First of all, we asked people to grade the atmosphere, the product presentation and the signalization from poor to excellent. The results show that most of the consumers of McDonalds think that the atmosphere in the restaurant is good (54.5%). People like the presentation of products, the signalization is clear and well categories according to them, they can find the new recipes, prices, clear images of products to know how they look like, this helps them in their choices.

On the contrary, people showed their disappointment regarding the service in restaurant: In fact, to the question: “Did an employee approach and ask if you had question?” 90,9% answered No and to the question “Did an employee give you an accurate information on product?” 81,8% said No.

In conclusion of those scores we can say that people aren’t really satisfied by the type of service the restaurant has. The company could, in order to respond to customer’s needs, put in place a more efficient service with employees whom care more about the satisfaction of their clients ( ask question, give information…)

Finally, McDonalds customers are loyal, 100% of them will return to this fast food again. They like the brand and 82% recommend it to a friend and family members.

Brands’ awareness 

Globally, Burger King is a well-known fast food brand. Regarding the first level of brand awareness,  we can see from different international rankings that Burger King is always on top 100 and even top 10 in the fast food industry (rankingthebrands.com). According to our survey which is based in France, every participants have the basic brand awareness of Burger King while the brand is not yet in France. As we know the King is going to come back to Paris soon, this could be a good sigh for the brand.

But if we go deep into the next level: the brand recall thanks to the survey we made. the result it’s not a optimistic. Indeed, only few people took Burger King as their top of the mind. But as we did this research in France where Burger King is not present, the result is fairly reasonable. So besides the questionnaire, we tried to ask some people we know from other countries and Burger King is still not their first choice. This result shows what we discussed in previous posts that Burger King is highly concentrated in the United States. The brand is also facing the problem that its main competitors McDonalds and KFC are always top of minds for consumers. So, the brand really needs to make a lot of efforts to catch up with its rivals. As Burger King has a low brand recall awareness based on our questionnaire, we can know the result of brand recognition. Again, it is mainly because the brand is not present in France. So we don’t really have any added value analysis. Hopefully that this situation will change with the coming back of Burger King in Paris.

Actually, McDonalds has the highest brand awareness according to our questionnaire. If we look into international vision, the brand is also always the leader in the fast food industry and remains on top 10 in most of the rankings (rankingthebrands.com).

On the recall level, McDonalds is still the top of minds. It is generally easier to recognize a brand rather than recall it from the memory. Even though in France, McDonalds has strong competitors like Quick and KFC, it is the major choice for french consumers. McDonalds changes constantly the menus and invent different products for french consumers. This can be a main reason for the brand to be top of minds. Comparing to Burger King, McDonalds is also a USA based brand, but it is not concentrate just in the US. The brand always tries to adapt national needs and traditions. Another thing worth mentioning is that even we put non-burger choices like Subway and Pizza Hut, McDonalds still won.

Regarding the brand recognition level, most people know “le menu best of” and often it’s their first choice when go to McDonalds. And they have some special products in mind like sandwich baguette. On this level, McDonalds does a fairly good job for people to keep in mind their products.

Keller’s Pyramid for McDonalds

 

Keller’s Pyramid for Burger King 

Salience:

• Who are you? Burger King is a global chain of hamburger fast-food restaurant started in 1953 and  headquartered in Florida, United States. Burger King reported it had over 13,000 outlets in 79 countries in 2013.
• The main objective is willingness to tailor each and every hamburger ordered to ‘have it your way’.
• Characteristics of the service are quick-service with mobile delivery.
• Distinctive sighs: The famous slogan ‘have it your way’ and The king.

Performance:

• Primary characteristic: offering reasonable priced quality food, served quickly, in attractive, clean surroundings.
• Secondary characteristic: rapid service, mobile delivery, motorway service, drive thru, kids area, oder machine.
• Efficiency: Burger King always try to improve efficiency with new technology such as a Two-Phase Kitchen Upgrade and use renewable energy.
• Price: BK will reverse its course over the last year and embrace a new ‘value-pricing’ strategy. The new menu will be three-tiered and attempt to combat chains that have used value pricing to boost sales and customer counts.

 Imagery: 

• User profile: Burger King try to reach everyone in each category with low price food and quick service. The brand make efforts especially to communicate with children and family.
• Purchases and usages: At the end of September 2012, Burger King reported it had 12,667 restaurants in 73 countries which 66 percent are in the United States.The brand also ranked the 5th in Top 100 Global Franchises rankings.Burger King is second only to McDonalds and holds a 15% share of the United States among fast food restaurant chains.
• Personality and values: Compared to McDonald, Burger King is more family-oriented and customer-focused. It created a unique niche and allows customer to make their own burgers.
• Experiences: Once established, expansion and growth happened quickly for the Burger King restaurant chain. The brand believes improving the customer experience in “each and every” restaurant is a key aim for the business. Burger King improved the speed of service and quality of food at restaurants by rolling out a nationwide customer insight program.

Judgement 

• Quality: Burger king is perceived as one of the best fast food restaurant in term of quality. People usually remember the good quality of the steak and the singular fries’ taste. Also Burger king put the accent on the fact that it is committed to quality and the freshness of the products.
• Credibility: Burger Kings has a good credibility regarding the quality of the food but less in term of healthy food for young population despite big advertising campaigns. This does not look sincere and decrease its credibility for future advertisings. Moreover, recent scandals about burgers containing horse meat decreased significantly its credibility regarding the provenance of its products.
• Consideration: Burger King is second on the market behind McDonald’s and there are more than 13000 restaurants dispatched in 89 countries. 11 millions of people eat Burger King every day and more than 56 millions of fries portions are served daily. Consideration is lower for Burger King than McDonalds but Burger King’s fries and whopper are a significant advantage to attract people.
• Superiority: Burger King is catching up with a strategy of differentiation and increases its presence around the world by penetrating new markets or by reinvesting where it had failed (France)

 

Feelings 

•  Warmth, fun: Young, colorful, cosy and playful.
• Excitement: People like spending time at Burger King because they offer very often new products (seasonal or permanent) and lot of promotion, especially for people with the Crown Card.
• Security: People used to feel secure regarding the provenance of products and the quality. However, Burger King went through several legal issues with food composition and especially this year during the horse meat scandal in the UK. Despite of two weeks of denials, Burger King admitted that it has been selling burger and whopper containing horse meat  This had a huge consequence on the security perception of consumers.
•  Social approval, self-respect: Burger king is approved and recommended by its consumers and especially by the “burger’s experts”.

Resonance:

• Loyalty: Strong loyalty of the fans. Burger King advertises massively to keep its best consumers and attract people that can make the difference among all burgers because they are potential future fans.
• Attachment: Burger king is number two on the market and increases its presence around the world. There is a visible attachment in France for example regarding the level of excitement for the reopening.
• Community: Burger King has an increasing community but does not interact enough with its consumers. Consequently the Facebook page is mainly for advertising but there is a lack of two-way communication. Today the number of Burger King’s Facebook likers is 5 times less than McDonalds and its has 3 times less followers on Twitter. However, burger King started to engage with consumers via Instagram so they can post pictures if they are satisfied.
• Engagement: Burger king uses the loyalty card system (Crown Card) to reward its consumers and encourage them to come back more often. This offer leads to a strong engagement from consumers because they can get products for free or discount on menu.

Authors: Viriginie Mialon, Bingying Zhang, Marvy Lungyeki, Maya Al Chaarani, Sandra Essafi

New sandwich for McDonalds in France!

Today in France, McDonalds launch new sandwiches: the Grand Bagel Cheese, Double Shiny Bacon and the Double Cornbread Barbecue.
This strategy reinforces the will of the company to make consumer live the american way of life. We can see it through their tag line: “So good that even Americans want to taste it!”

Burger King is coming!

The American fast food giant Burger King will make a long awaited return to Paris, just in time for Christmas!

4Ps: McDonald VS Burger King

McDonald

Author: Maya Al Chaarani

Editor: Sandra ESSAFI

Burger King

Product

 As a fast food chain, Burger King produces, hamburgers, cheeseburgers as well as Fries, Salads, Hash browns, Onion rings, Coffee, Juice, Shakes, cookies and pies.

Burger King sets itself apart from competition with its “have it your way” theme which allows individualize each orders with many options including fries or onion rings, cheese, bacon, mustard, ketchup, mayonnaise, lettuce, tomato, pickles, and onion.

The nation’s No. 2 burger chain will add Starbucks Corp.’s Seattle’s Best Coffee to all its U.S. restaurants in a phased roll-out that begins in the summer of 2010. Under the effort, more than 7,000 Burger King Restaurants will begin selling the coffee along with iced varieties that also come with a choice of plain, vanilla or mocha flavors and whipped toppings.

Burger King has signed a licensing deal with ConAgra Foods Lamb Weston which will result in offering a retail line of microwaveable Burger King Brand French fries at select retailers in the United States, including Wal-Mart.

At the same time, Burger King has plenty of healthy choices like Wraps, Garden Salad, Fresh Apple Slides.

Recently, the brand also introduce Satisfries, a new great tasting crinkle-out french fries with 40% less fat and 30% fewer calories. They held a contest on Instagram to promote the new product.

Price

Burger King recently joined McDonalds in offering value menus like the $1 double cheese burger or the $1.29 Whopper Jr., 50¢ Cones, $1 Frozen Lemonades and the “Mix and Match” 2 for $5 deal which is suitable with the increase of the demand for cheaper meals due to the economical environment.

The fast-food restaurant vowed to maintain the balance between value and premium products, but more budget-friendly offers can be expected.

The company also will continue to sell its new premium burger, the Steakhouse XT, for $3. Indeed, the company has focused on its “Penny pincher” value menu and “Stunner deals” discounts.

Place

Burger King operates its business through franchises, under a franchise arrangement, the franchisees invest in the equipment, signage, seating and decor, while the company owns or leases the land and building. The company generates revenues from three sources: sales at company restaurants, royalties and franchise fees and property income from those franchises that lease or sub lease property from the company.

At the end of September 2012, Burger King reported it had 12,667 restaurants in 73 countries which 66 percent are in the United States, others are established in international locations such as Africa, Asia and the Middle East.

In Europe, Burger King usually locate near traveling points such as train stations and airports. The up-coming restaurant in Paris will be located near the station Saint-Lazare. On the other hand, in Asia, the brand has another strategy to put its restaurants in shopping centers and concept stores.

Promotion

Burger Kings Big Value Menu $1 “Talent Show” invites customers to display their talent via videos they submit with the goal of winning a menu item. The firm applies a promotional strategy which involves the consumer which can reinforce and raise the number of the fan club.

Burger King is always looking for ways to offer affordable menus and items for their customers. Moreover, the company uses heavily the social medias networks in order to encourage the customers to win gift which maintain the activities of the fan community.

The company had program also another advertising campaign named “The next best move” in 2010 to feature scheduled promotional tours with stops in urban communities around the united state. A costly basketball event targeting young African American males. They used basketball as a cultural entry point because it’s such a part of the urban framework of these consumers that go to Burger King. The effort is augmented by a special website where participants can describe community service contributions a digital tactic which helps collect data. These informations will probably be use in order to sharp and improve the knowledge of the target. A promotional action which targeted a specific target segment with the goal to shows the fast food links with the urban music industry and gather a larger community.

You will find here bellow, the videos of both campaigns:

The company continues to respond to consumers seeking affordable meals with value promotions like the six-month launch of the $1 double cheeseburger. Burger King also launched a line of holiday greeting cards that gave the recipient a dollar bill to be used to purchase the cheeseburger. Plus, Burger King backed the launch of the Tendercrisp premium Chicken burger, with a promotion theme encouraging consumers to “cheat on beef”’, an offer which aim to raise the sales volume. But, it is also a good tool  to push the sales of new product. Moreover, these kind of actions can generate word-of-mouth, an informal way of communication which can measure the success of a campaign and drive more attendance in the restaurants.

Author: Bingying Zhang

Editor: Viriginie Mialon
Editor: Marvy Lungyeki

Targets

Author: Sandra Essafi
Editor: Maya Al Chaarani

Burger King’s targets

 -Young children: Burger King wants to attract children by offering complimentary toys with different menus. Burger king offers four different menus adapted for children from different ages and with different taste. (For example menus that include burger or 4 or 6 nuggets). By attracting children, Burger Kind also attract the parents that want to spend some quality time with their children and make them happy.

 -Students: Students usually eat with their friends during the break and look for fast food restaurant due to the small amount of time they get. They tend to look for facility to respond to their basic eating and drinking needs. Students prefer cheap food but want to have different alternative so Burger King targets these groups of people by offering several menus for similar prices. This type of consumer does not have a specific time to eat so Burger King is open the whole day. It fits to their life style and correspond to the general social trends touching this target.

 -Working people: This target includes Burger King’s main target, 18-35 year old men that like burger King for the big size and quality of its burgers. Burger King also targets working people with different preoccupations such as time, quality and quantity. This people do not have time to think about new places so they develop habits and go to restaurant where they will find the same standards. A large part of people from this category looks for take away food in order to eat at their work place. They reserve a small amount of time for eating and are usually alone so burger King offers delivery in certain countries such as the US. This group is mainly composed of male but burger King also target working female via healthier food such as salads and fruits.

 -Lower and middle class families: Families with low revenues look for tasty food at a low price in order to spend quality time with their children. Burger King has though about this families by offering very cheap meals and toys for children. The parents can eat and find entertainment for affordable price.

 -Burger Fans: Some people are passionate about burgers and they represent one of the most exigent targets for Burger King. They are specialized and can easily compare quality, quantity and flavor of different burgers from fast food chains.

Author: Viriginie Mialon

Editor: Marvy Lungyeki
Editor: Bingying Zhang

SWOT Analysis

 

McDonald SWOT Analysis

A. Strengths 

• McDonalds has strong global presence and is considered as a market leader in both the domestic as well as the international markets, it is known as one of the world’s most recognized logos, which has built up huge brand equity.
• A global brand that owns 34,000 restaurants serving in 119 countries. Of these 34,000 restaurants at least 14,000 restaurants are situated in the US. It is the No. 1 fast-food company by sales. 5.6% sales growth located itself in major airports, cities, highways, tourist locations, theme parks. Large amounts of investment have gone into supporting its franchise network, 75% of stores are franchises.
• It uses economies of scale for reducing the cost, as its huge expansion diversifies the overall risk involved with the economic performance. It also adapts to the cultural differences regarding the region where the restaurant is set up.
• They own an active children’s charity by the name ‘The Ronald McDonald House’. It has branded menu items such as Big Mac, Chicken Mc Nuggets, which further promote McDonalds
• It takes steps in adjusting the ingredients and product offerings in order to comply with the upgraded health standards so it is recognized as a socially responsible and community oriented firm. It takes food safety extremely cautiously It was the first to provide the customers about nutrition facts.
• It has an efficient food preparation style that follows the process in a systematic way, it has loyal staff and strong management team, good innovation and product development. It continually innovates to retain customers in the business with a variety of choices

B. Weaknesses 

• It uses advertising that mostly targets children, which is a vulnerable and sensitive target
• There is a high employee turn-over.
• It has not yet accomplish going on the trend of organic food. Core product line out of line with the trend towards healthier lifestyles for adults and children. Product line heavily focused towards hot food and burgers.
• Price competition with the competitors results in low revenue.
• There is a lack of disruptive innovative products.
• Few of the products are seasonal (salad, ice-cream)
• There is a rise of quality issues across the franchise network.

C. Opportunities 

• It can adapt to the needs of the societies and undergo an innovative product line by optional items. It can create new product offerings, use mobile text messaging to offer services that appeal to consumers. McDonald’s also responds to social changes – by innovation within healthier lifestyle foods for example it moves into hot baguettes and healthier snacks (fruits) have supported its new positioning. The new “formats”, McCafé, having Wifi internet links should help in attracting segments, also installing children’s play-parks and focusing on educating consumers about health, fitness
• It may continue focus on corporate social responsibility, reducing the impact on the environment and community linkages by researching ways to use ‘green’ energy and packaging which will work as a part of their promotional effort as well as fulfill their social responsibility.
• It can upscale some of its restaurant settings at luxurious locations to attract more customers.
• It can slow down the level of expansion in order to increase the profitability of the organization.
• It may increase joint ventures with retailers (e.g. supermarkets) and offer better locations for franchisees.
• Use of CRM, database marketing should be used to more accurately market to its consumer target groups. It could identify likely customers (based on modeling and profiles of shoppers) and prevent brand switching. Strengthen its value proposition and offering to encourage customers who visit coffee shops into McDonalds.
• It can implement deeper international expansion into emerging markets of Asia

D. Threats 

• Foreign currency fluctuations are regarded to be a major problem as it uses standard pricing for its food items. Recession or turn down in economy may affect the retailer sales, as household budgets tighten reducing spend and number of visitors. The recession also negatively impacts the holding position of the firm regarding its revenue streams, even though they are quite diversified.
• Social changes in consumer groups are encouraging balanced meals, 5 fruits and vegetables per day? “Mangez, Bougez!”.
• Emergence of major fast food competitors: Burger King, Starbucks, Wendy’s, Taco Bell, KFC. There are competitive pressures as new entrants are offering value and greater product ranges and healthier lifestyles products. E.g. subway, supermarkets, M&S.
• Pressure of environmental and health issues regarding the fast food chain, McDonald’s was sued various times for unhealthy food, usually addictive. Consumers now focus on nutrition and healthier lifestyles.
• Heavy investments on promotional campaigns which decrease the gaining of market share.
• Some parents criticize the firm for maintaining marketing strategy that focuses on kids, who later on take it as a trend to their adulthood.
• The expansion has made the firm vulnerable to the slow economies of the other countries as more restaurants give a rise to increasing their food offering and declining the price

Author: Maya Al Chaarani

Editor: Sandra ESSAFI

Burger King SWOT Analysis

A. Strengths

• Global brand name: Burger King is a globally recognized fast food brand thanks to the famous hamburger ‘whopper’ and it’s slogan “have it your way”. The grand has a high brand awareness in the fast food industry according to QSR magazine right behind McDonald’s and KFC.

• Franchises diversification: At the end of September 2012, Burger King reported it had 12,667 restaurants in 73 countries which 66 percent are in the United States, others are established in international locations such as Africa, Asia and the Middle East. While the majority of franchises are smaller operations, several have grown into major corporations in their own right. The brand also ranked the 5th in Top 100 Global Franchises rankings.

• Established market share: Burger King is second only to McDonalds and holds a 15% share of the United States among fast food restaurant chains. The company’s profitability has also increased in recent years.
• Growth plan: The company is able to grow while minimizing large capital expenditure, meanwhile it collects fees and royalties from each franchise.

B. Weaknesses

• Heavily concentrated in the United States: Although the company operates in many international venues, the majority of restaurants are in the United States. This concentration of operations in one geographic area company’s exposure to local factors.
• Relies on franchises: The company doesn’t have enough corporately owned stores which means it relies heavily on franchises to excite its promise.
• High calorie food: It’s always an issue that fast food with high fat and high calorie is not good for health conscious people. And there is some indication that Burger King may have been slow to transition to leaner and healthier restaurant to please its long term customers who are fans of the big sandwiches.
• Burger King dose not advertise their products like their competitors.

C. Opportunities

• Rethink the restaurant experience with new design which combine new technologies devises and redefine a clear mantra of the brand to strengthen the position of the brand into the audience mind
• Harmonize the company image and identity worldwide with a strict and unique segment for the restaurant decor and web site
• Possibility to connect their home delivery with an application and improve their clients database
• Involving the customers through digital game in order to raise loyalty (such as a “BK Nation or Lovers”) and implement a crow-funding strategy
• Increase co-branding with different partners for the condiments as for the desserts (ice-cream and cakes)
• Emphasis the new healthier menus like they do with the new “satisfies fries” and highlight the fact that contrary to their main competitors most of their items are more healthier
• They should put a focus on corporate social responsibility, by introducing clean energy and packaging to respond to the social change and  lifestyle. Underline and expand the BK McLamore Foundation worldwide
• Product improvement, tailoring it as per tastes of people around the world, in order to match with their slogan “Have it your way”
• Upgrade the varieties of children menus by making it more appealing (digital games or create co-branding with important brand in the  toys industry and video-games)
• Put forward  value menu featuring six items at less than $1
• Diversification of their services,  for instance with a coffee corner in the most profitable restaurants which will serve Seattle’s Best Coffee (a Starbuck’s brand)- “The King coffee” a possible way to compete with the “Mc Coffee”
• New opportunities in growing economies (India, China, Singapore, and Malaysia)
• Reduce cost of entry for Burger King franchise and under performing outlets

D.Threats

• Changing consumer eating habits towards healthier food alternatives. Campaign against obesity target directly fast food chain such as Burger King.
• Intense competition from other chains such as McDonald’s, Wendy, KFC but also little fast food restaurants targeting specific segments. (ex: delivered food, healthy fast food, fine dining fast food etc.)
• Local fast food restaurant chains.
• Increasing labour cost putting pressure on margins and is a threat to keep low price and quality expected by consumers.
• Slow recovering economy that has slow down Burger King international development.
• Saturated fast food markets in the developed economies
• Currency fluctuations

Author: Bingying Zhang

Editor: Viriginie Mialon
Editor: Marvy Lungyeki

Burger King returns to Paris after 15 years

Lovers of ‘Le Whopper’ in Paris will be licking their lips. After 15 years away, US fast food giant Burger King will soon be making a return to the French capital, according to a report in French daily Le Figaro on Friday. After closing stores in Paris in 1997 due to poor sales, Burger King is planning to open a branch in St Lazare train station.

Customer now have the choice between the fast food rivals’ signature beef burgers ‘The Big Mac’ and ‘The Whopper’ to satisfy their cravings.

Here is a ‘fausse’ campaign to create a buzz.

Rivals around the world

McDonald: a worldwide fast food king

McDonald’s has thousands of competitors, each seeking a share of the market. McDonald’s recognizes that it is up against not only other large burger and chicken chains but also independently owned fish and chips shops and other eat-in or take-out establishments. Therefore, a company like McDonald’s has to develop competitive strategies to differentiate themselves from their rivals. Actually, any organizations need to be in touch with their business environment in order to make sure that what they do fits with customer expectations. Especially, that expectations change over time and countries. Indeed, even huge corporation like them have to watch their back in order to remain in the top of their game.  Moreover, the market segment in which McDonald’s operates is becoming increasingly competitive. But how this firm stills the number one in the global market scale? In this purpose we will look together how and why the American multinational remain on the top of his game in three crucial regions of the world.

First of all, if McDonald is the world’s largest chain of fast food restaurants is because the corporation serve around 68 million customers daily in 119 countries. But the secret of such success lies on a strong strategic competitive advantage that the company still building until now. Indeed, the impressive supply chain of the corporation is pretty well known. And it play  a key role since it permits them to offer the lowest meal. Furthermore, McDonald does not hesitate to go to new markets with an extremely clever distribution channel.

Nevertheless, in this crowded market place, McDonald’s lead came under pressure largely because many others fast foods have either copied the trail blazing idea that was previously set by McDonald. Besides, McDonald’s recognizes the need to respond and it is looking to increase the competitive gap by:

• adding greater value through innovation
• making the process of visiting a McDonald’s restaurant less routine and controlled
• enhancing the overall in house experience.
• leading on all the social medias platforms

In addition, the following quote from Mister Don Thompson, chief executive officer of MacDonald’s, illustrates the three important aspects of the company’s strategy in order to gain and keep their competitive advantage:

“While the informal eating out market remains challenging and economic uncertainty is pressuring consumer spending, we’re continuing to differentiate the McDonald’s experience by uniting consumer insights, innovation and execution.” said Thompson.

In fact, McDonald’s now offers late night breakfasts, a new Dollar Menu, and is advertising vegetarian value priced meals in markets like India to attract more customers. The company also said that a new line of quarter pounder hamburgers, including a bacon habanero ranch version, was selling well. It has rolled out an egg white version of its popular McMuffin breakfast sandwich and has gotten rid of slow movers such as Angus burgers and its Fruit & Walnut Salad. Furthermore, the American corporation had changes the restaurant interior design and made it more technological friendly and modern. But above all, what we have to underline here that McDonald focus on the customer’s needs and demands which help them to see theirs flaws and fix it right away. And even more upgrade their services and products. A strategic position which differentiates the multinational company from her rivals. But also give them the ability to dominate and to be a head of the industry.

Burger King: after years of struggling
This post is a business analysis on the two important public corporations: McDonalds and Burger King. Both of them are competing in the fast food industry. To add, the fast food industry is one of the largest food services sectors around the world and one of the most competitive industry. This sector focuses on the lower prices strategy in order to attract customers worldwide. McDonalds and Burger King, both compete with all types of food retailers on the basis of prices, convenience, food qualities and customer services.

Regarding Burger King, the majority of their  fast-food restaurants are locate internationally and  are privately owned franchises. Whereas the  majority of those franchisees are smaller operations, several have grown into major corporations in their own . At the end of the company’s fiscal quarter in September 2012, Burger King reported it had 12,667 outlets in 73 countries of these 66%  are in the United States and 95%  are privately owned and operated. The company locations employ more than 37,000 people who serve approximately 11.4 million customers daily.

Besides, Burger King is also redesigning it is restaurants, changing it is packaging, cleaning up it is cooking process and changing uniforms to reflect a more modern approach to food services. Finlay, these factors will contribute to a more desirable experience for customers. But Burger King does look rather old school and “out of touch” by not having the premium chicken wraps, salads and coffee drinks that have become the “most-have” in a fast food in 2012. Not having those items certainly has not helped in the battle to stay relevant. As far as improvement goes, Burger King’s core question should be: how to better present the value proposition? And how to better underscore what makes Burger King the ideal destination for fast food customers? In fact, there must be something McDonald’s and Wendy’s are not doing and something that can be tied back to Burger King’s specific promise to their customers. That would present a competitive advantage if introduced into the market. That is how Burger King will truly stand out.

A saturated domestic market…

It is unnecessary to talk about the supremacy of the brand with the golden arches in the North American market. However, smaller rivals such as Wendy’s, Burger King, KFC or Subway are upping their game with bacon sundaes and limited-time offers in North America. Wendy’s for instance is known for his square hamburgers and thick frosty shakes but recently introduced a pretzel bacon cheeseburger that appears to be chain’s best-selling new product in about ten years. And here we are only talking about the front runners of the competition. Indeed, Five Guys, Yum! and In-N-Out and others compose the second line of the pack.

Let’s not forget also that non-burger competition has also increased. Actually, in this category we can count Starbucks, Taco Bell, Dunkin Donuts, Pizza Hut and Domino’s Pizza. Further, we believe that Chipotle’s success in selling burritos may have reinvigorated the broader market for Mexican food. On the higher-end, McDonald’s has to compete with customers who are looking to healthier options at Panera, as well as the organic offering of Chipotle. Therefore, the brand fights back by offering more healthy menus and underline the quality of all their ingredients through advertising campaigns. And the uses of local suppliers. This growing competition and saturation on the market is a huge challenge for the number one of the fast-foods industry. The highly globalized segment of the world economy, markets where consumers have standardized preferences. Plus, the customers are driven with the curiosity to try news burgers recipes and concepts. Since, they exhaust all the golden arches menus so they look to new experiences or taste somewhere else. In addition, brands restaurants such as Taco Bell, Yum and KFC grew the same store sales: 7% and 4%, respectively, during the most recent quarter. Taco Bell is the only major competitor, in our view, to McDonald’s value proposition with premium items.

• The North America fast-food restaurants market

Moreover, the firm has to cope with a really negative image in terms of health but also business practices ( see post on advertising) . Indeed, despite is important share in the American market, McDonald is not so love and it is positions as a cheap comfort food. In addition, the 14,098 restaurants are more often visited by low income profile. Indeed, the leader of burger has a quite good position. Regardless, he still represent the symbol of bad nutrition and excess. Even though, is not always the truth as we can read on this counting calories illustration from the Wall Street Journal, here bellow.

This shows us that Mc Donald apparently is not the worst among his competitors. Indeed, the giant of the fast-food is just before one of his newest competitors in the United-State: Shake Shack.

As regards, Shake Shack was started as a hot dog cart in Madison Square Park. Only after the food truck grew in popularity, they developed the concept. And only after several years in Madison Square Park did Shake Shack open a second location. It is a local food concept which is well known to be the best place for fries and a future serious rival for McDonald. For instance, New York Times restaurant critic Pete Wells reviewed Shake Shack and claimed that “you can get better fries just about anywhere.” Shake Shack recently debuted non-frozen fries at it Upper East Side location. Its legacy can be seen not just in the rush of good, cheap burgers, but in the growing recognition that certain fine dining values, like caring service and premium ingredients. In their early days, Shake Shack’s committed to better ingredients, like antibiotic and hormone-free “100 percent all-natural” Angus beef. With a stronger promise of sustainability, made from beef that is local, organic or grass-fed. Regarding their expansion plan, Shake Shack never expands until “the right leadership is in place”. From there, the chain only wants to go to places that have a community interested in embracing it. Yet, the newbie in the industry is processing fast ant efficiently since the company already possess fourteen restaurants. This type of concept went viral and was largely spread  even out the United States. Indeed, this concept was adopt in France too and more precisely in Paris where such fast-food services took an important place on customers minds. In fact, “Le camion qui fume” for instance is the perfect example to illustrate the success of such concept in the city. Since, the food truck is today known to be one of the best places in the capital for having a delicious burger.

Formerly McDonald’s strongest competitor, Burger King has lost a lot of ground over the last decade in the American market. According to Advertising Age, McDonald’s was 101 percent ahead of Burger King in average domestic revenue per unit in 2010, more than double his lead from 10 years earlier.While McDonald’s is far ahead of the entire quick-service pack, at more than $34 billion, the chain’s domestic system-wide sales were triple it is closest competitor, Subway, in 2011 it is recent triumphs stand in sharp contrast to Burger King’s struggles.

A promising Asian market place and the European challenge.

China is the place where most fast-food chains, like so many industries, see big expansion. Mr Carucci  thinks that China will be “the biggest growth opportunity for the industry this century”. If so, then Yum!, which has the greatest presence in China of any Western fast-food company will be celebrating. Since, around 30% of the company’s profits come from China, and in the next five years is expected to grow to 40%. India also looks like a profitable opportunity. In addition, others plans to grow more business in Russia and elsewhere in Europe. Given that around 75% of fast-food companies’ revenue in Europe comes from people eating in the restaurants (compared with half in America), older European outlets are being done up to make them more attractive places. What’s worth to mention is that Taiwan’s fried chicken fast-food chain Dicos has vowed to open 450 new chains each year, to total 5,000 restaurants by 2020 on the Chinese mainland. The fast-food chain that was launched in 1996 and has around 2,000 restaurants in Chinese second and third-tier cities now aims to enter first-tier cities  including Beijing, Shanghai and Guangzhou according to the company’s top executive. This way, they moved the brand into direct competition with its Western rivals, such as McDonald’s Corp and Kentucky Fried Chicken Brands.

 

 

In Japan, for instance, McDonald’s and Burger King are facing strong competition from Mos Burger, in China by Kentucky Fried Kitchen (KFC), Pizza Hut, and local start-ups. Even in the small Greek market, McDonald’s is no match for local upstart Goody’s. While McDonald’s major competitor in the United Kingdom is Burger King, whereas in France is competitors are Quick, KFC and Subway.

Obviously,the golden arches’s corporation is facing a tough competition on every front and it is possible to see their sales weaker. However, in Europe and Asia we would not be surprised to see customers return to McDonald’s after trying all of the new offerings since many customers built an emotional connections with the brand. Plus, it is also a question if habits.  Moreover, Bill Smead, a manager at the Smead Value Fund in Seattle, who holds shares in McDonald’s corporation is betting that the iconic chain will profit from the fact that it is an “emotional and legal addiction.”

“The company is in a normal down cycle. It benefited from the global recession that forced cash-strapped diners to trade down to McDonald’s. It also got a big bump from profit-boosting new drinks like lattes and smoothies“  Smead said.

Source: http://foodbeast.com/2013/08/07/why-some-countries-dont-have-mcdonalds-from-iceland-to-bolivia/

Author: Marvy Lungyeki

Editor: Bingying Zhang

Source

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http://financials.morningstar.com/competitors/industry-peer.action?t=MCD

http://www.wikinvest.com/stock/McDonald%27s_Corporation_%28NYSE:MCD%29

http://www.brandchannel.com/home/post/2012/07/18/mcdonalds-social-media-engagement-071812.aspx

http://www.economist.com/node/16380043

http://www.forbes.com/sites/panosmourdoukoutas/2013/07/22/mcdonalds-big-challenge-at-home-and-abroad/

http://seekingalpha.com/article/1005311-mcdonalds-falling-prey-to-competition

http://www.ibtimes.co.uk/articles/493686/20130723/retail-food-recession-europe-competition-sales.htm

http://www.businessweek.com/articles/2013-07-22/four-reasons-mcdonald-s-is-worried-about-the-near-future

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http://www.insidermonkey.com/blog/the-wendys-co-wen-burger-king-worldwide-inc-bkw-forget-mcdonalds-corporation-mcd-get-30-upside-with-this-overlooked-burger-stock-215438/

http://www.washingtonpost.com/blogs/wonkblog/wp/2013/07/24/whats-eating-mcdonalds-its-core-demographic-can-barely-afford-to-eat-there/

Porter analysis: McDonald VS Burger King

• Threat of substitute product: LOW
McDonalds: even if competitors sell the same type of products it won’t be a direct substitute. McDonalds has its own secret recipes and it is difficult to copy them.
Burger King has its own inimitable recipes:
– Meat: their burgers are cooked with a unique technic, the flame grilling that requires specific grills. This technic gives a strong bbq taste to the meat.
– Burger King decided to communicate about its French fries because they have a very distinguishable taste

• Bargaining power of customers: HIGH
McDonalds & Burger king has to be specialized in the product that they offer to their customers because there is no switch costs for them. They have to enhance specialized products in order to keep loyalty customers. In fact, nowadays people suffers from financial crisis and their purchasing power is decreasing so they pay more attention to their expansive and they will not hesitate to switch to another fast food if this one is cheaper. Furthermore, way of life is changing and people are more aware of what they eat and looking for healthy food.

• Bargaining power of suppliers: LOW
McDonalds: The company has a high power on its suppliers. It controls them as subsidiaries because for lot of them McDonalds remains their main client. Nevertheless some suppliers aren’t dependent of McDonalds like Coca Cola or Danone.
Burger King chooses its suppliers after evaluating lots of criteria like delivery, timeliness and financial conditions. Each supplier has to become an approved suppliers and to maintain its quality of services.

• Threat of new entrants: LOW
McDonalds & Burger King: The enter in the market of Fast Food is easily accessible thanks to low starter cost and the fact that the atmosphere and the products are easily reproducible. But the fast food market is saturated and new entrants have few chances to obtain so many customers as the already leader companies on this market even if they set up this type of service.

• Competitive rivalry among firms: HIGH
McDonalds & Burger King have a big among of competitors, being in competition of a fast food company is easy. These two companies have direct and indirect competitors.
Direct competitors: Multinational like KFC, Subway…
Indirect competitors: Pizza stores (PizzaHut, Dominos Pizza, Pizza Rabbit…) and proximity outlets (bakeries, snakes, kebab…).

• Public regulation :
McDonalds & Burger King: Some governments are campaigning against junk food. For example in France they put in place advertising for this purpose with headlines like « Manger, Bouger » «Pour votre santé mangez 5 fruits et légumes par jour».

Author: Virginie Mialon
Editors: Maya Al Chaarani &Sandra Essafi

McDonald VS Burger King: Brand history

McDonald is today the biggest fast food restaurant chain in the world. It all started in 1952 when the salesman Ray Kroc buy the stock market listing of McDonalds and turn it into a big company: the real concept emerge. The opening of its first restaurant was in 1955 in Des Plaines, Chicago, Illinois.
In 1967 the company did its entry in Canada.From then Mcdonalds began to go more and more international and is located today in 119 countries. By being more popular, McDonalds proceed in changes over the years in order to satisfy its consumers : a new logo was designed, the drive-thru see the light in 1975, the company started a new approach by installing seats in their restaurants…The biggest innovation was in 1996 when the company launched « McDonalds.com » : the firm is offering its website to a large number of country in which it is located. McDonalds is an endless growing up company around the world and its history is not coming to an end.

Author: Maya Al Chaarani

Editor: Sandra ESSAFI

 

Burger King´s business dates back more than a half-century, having been founded in 1954 when James McLamore and David Edgerton opened the first Burger King restaurant in Miami, Florida. The Whopper® sandwich was introduced in 1957 and became an instant success, leading the founders to develop the “Burger King, HOME OF THE WHOPPER®” campaign in 1958. In 1961, McLamore and Edgerton acquired national and international franchising rights for the Burger King brand, which was followed by the Company´s first foray into international markets with the opening of two restaurants in Puerto Rico in 1963.
In 1967, the Pillsbury Company acquired Burger King Corporation, which became a fully owned subsidiary. James McLamore joined the board of directors of Pillsbury and continued be involved with Burger King until his retirement. At the time of the acquisition, the Burger King system was comprised of 274 restaurants with 8,000 employees in the U.S.A. and abroad.
A number of important menu innovations were introduced in the 1980´s, including the debut of breakfast with the CROISSAN´WICH® in 1985 and CHICKEN TENDERS® in 1986. 1986 was a record year for the system, with 546 new restaurants opened worldwide, bringing the system to 4,743 restaurants and $4.5 billion in system-wide sales, including 402 international restaurants in 25 countries.
In 2006, Burger King Holdings completed a successful initial public offering, and listed its stock on the New York Stock Exchange. On October 19, 2010, 3G Capital, acquired Burger King Holdings. As a result of the acquisition by 3G, we became a privately-held company once again.
In April 2012, Burger King Worldwide Holdings, Inc. and Justice Holdings Limited (“Justice”) (LSE:JUSH), a publicly-listed UK investment company, entered into a definitive business combination agreement to list Burger King on the New York Stock Exchange upon completion of the transaction. Shares were listed and began trading on June 20, 2012 under the ticker NYSE:BKW. 3G Capital retains roughly 70% ownership of the company.

Bingying Zhang
Virginie Mialon
Marvy Lungyeki