Unformatted text preview: uying customers in currently
targeted segments. It also targets new customers in new segments.
A marketing manager has to think about the following questions before
implementing a market development strategy: Is it profitable? Will it 38 | P a g e require the introduction of new or modified products? Is the customer and
channel well enough researched and understood?
The marketing manager uses these four groups to give more focus to the
market segment decision: existing customers, competitor customers, nonbuying in current segments, new segments. McDonalds is currently
following above mentioned strategy, to focus on market segments. For
serving synonymously to the existing customers they are coming up with
different menus as per change in taste and preference of their customer
e.g.: happy price menu, beverages including milk shakes and cold coffees
etc. Also, by keeping in mind their rivals they are introducing products to
compete them e.g. to answer the KFC they came up with chicken
mcnuggets. They are adopting pricing policies for non-buying customer
and as well as new segments. PRODUCT DEVELOPMENT STRATEGY
In business and engineering, new product development (NPD) is the term
used to describe the complete process of bringing a new product or
service to market. There are two parallel paths involved in the NPD
process: one involves the idea generation, product design, and detail
engineering; the other involves market research and marketing analysis.
Companies typically see new product development as the first stage in
generating and commercializing new products within the overall strategic
process of product life cycle management used to maintain or grow their
McDonald's is always within the fast-food industry, but frequently markets
new burgers. Frequently, when a firm creates new products, it can gain
new customers for these products. Hence, new product development can
be a crucial business development strategy for firms to stay competitive.
39 | P a g e McDonald¶s are always enhancing their existing product along with it; they
also try to introduce new and new products so that they can easily survive
in market. DIVERSIFICATION
Diversification is a form of growth marketing strategy for a company. It
seeks to increase profitability through greater sales volume obtained from
new products and new markets. Diversification can occur either at the
business unit or at the corporate level. At the business unit level, it is
most likely to expand into a new segment of an industry in which the
business is already in.
At the corporate level, it is generally and it¶s also very interesting entering
a promising business outside of the scope of the existing business unit.
McDonald's made its foray into the hospitality industry in 2001, opening
two hotels in Switzerland, at Zurich and Lully. The "Golden Arch Hotels"
were positioned as four-star facilities with the latest in-room technology
and very original, modern interior design. Reactions and reviews of
guests following their stay there were mixed.
Most seemed to agree, that the hotel's four-star rating didn't seem to
correspond with McDonald's image. The Golden Arch in Zurich is
McDonald's first hotel. IMPORTANCE OF PLC IN MCDONALD¶S 40 | P a g e The requirements of customers change over time and thus the product
offering has to be changed accordingly. What is the trend today may be
out of market within few weeks. Thus continuous innovation is required. To counter these changes McDonalds has continuously introduced new
products and has phased out the old ones which were at the decline
stage of their PLC. The introduction is timed such that the new product
does not cannibalize (which eats same of it) the product already in the
maturity or growth stage. Thus the secret lies in getting profits with
different products in the different stages of the PLC. A perfect example of revitalizing a product in decline phase 41 | P a g e The French Fries have been an important part of the McDonalds menu
worldwide. But now it was in the stage of decline and was actually not
generating proper return. In an attempt to revitalize it, a new variant was
introduced namely Shake Shake Fries. This is being served with chatpata
spice mix which has resulted in increase in the sales of French Fries and
has elevated it from to the decline stage.
This is used to delay the decline of a well established product which has
the potential of generating further revenue. 42 | P a g e MCDONALIZING THE SUPPLIERS
McDonald¶s has changed the nature of not only the food service industry
but also the food processing industry as well. McDonald¶s realized that
the battle between fast food chains would increasingly be one of
efficiency of supply, lower cost production and greater desire to innovate.
It pioneered with innovative and sophisticated food distribution and
packaging systems when the traditional food processors were unwilling or
unable to supply food items that McDonald¶s demanded. They achieved
amazing consistency by giving more att...
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This note was uploaded on 01/12/2014 for the course IBS. 403 taught by Professor Mikedover during the Fall '13 term at Humber.
- Fall '13
- Ordinary People