Differentiation & Positioning of Fast Food Company

1. Differentiation & Positioning of Fast Food Company

2. Professor: Cheng – Nan Chen • Students: Lim Veron Nardy –M987Z210 Yoseph Kaburuan –M987Z213 • Sermsri C. –M987Z220 • Lee Po Kun –M9870114 • Nguyen Duy –M987Z218 • Pham Thi Nguyet –M987Z241 • Differentiation and Positioning • Group 7

3. Conclusion and Recomendation Marketing Environment (Micro & Macro) New strategy to repositioning – differentiation Subway SWOT analysis Previous position and challenges Question Discussion Introduction Contents

4. Fast food is the term given to food that can be prepared and served very quickly. Fast Services Food = General term used for a limited menu of foods that lend themselves to production-line techniques; suppliers tend to specialize in products such as hamburger, pizzas, chicken, or sandwiches. Introduction-Fast Food

5. Fred DeLuca founded the SUBWAY® chain in Connecticut, USA, in 1965. The company has since grown into a multi-billion pound business, with 31,949 outlets in 91 countries. The SUBWAY® chain aims to increase the number of outlets it has in the UK and Ireland to over 2,000 stores by 2010.

6. In 2009, the SUBWAY® chain was ranked the number one franchise opportunity by Entrepreneur Magazine. 

7. In 2008, the SUBWAY® chain was voted the No. 1 sandwich provider in the British Sandwich Association’s (BSA) sandwich industry report.  In most years, about 70% of new SUBWAY® franchises are sold to existing SUBWAY® owners.  The low fat menu is popular with customers all around the world. 

8. Diet Start Date: Mid-March 1998 Height: 6' 2'' Starting weight: 425 pounds Current weight: 190 pounds Jared Fogle

9. The Jared Diet: • New healthier sandwiches: less than 7 grams of fat • Menu for lunch:Six-inch turkey, no mayo, no oil, hold the cheese • Menu for dinner:A footlong veggie, baked potato chips, diet beverage

10. Background - The McDonald's Story The McDonald's story began in 1940 when Dick and Mac McDonald opened a highly successful car-hop, barbecue restaurant in San Bernardino, Calif. They temporarily closed their restaurant, built a simplified menu around their best-liked products, designed a more efficient interior and re-opened with self-service at the former car hop windows. McDonald’s

11. Thus, they invented the self-service, drive-in concept that was a limited-menu, paper-service, hand-out operation, featuring 15-cent hamburgers, 19-cent cheeseburgers, 20-cent malts and 10-cent French fries. • After a slow start, business boomed. In 1952, American Restaurant Magazine ran a cover story on the phenomenal success of the brother's new concept. McDonald’s

12. In 1955, Ray was granted exclusive rights by the brothers to develop and franchise McDonald's drive-ins for the United States. Ray formed McDonald's System, Inc. in 1955. Ray opened the 9th McDonald's, his first, in Des Plaines, IL, in April 1955. In 1961, Ray bought from the McDonald's brothers the proprietary rights to the McDonald's system, including all rights to the rest of the world. The organization that Ray founded -- today's McDonald's Corporation -- proceeded to add more than 23,000 McDonald's restaurants and 4,500 franchisees across more than 111 countries around the world. McDonald’s

13. India In India, there are no Big Macs because the Hindu people don’t eat beef. However, they have the Maharaja Mac, which is a Big Mac made of lamb or chicken meat. There is also a vegetarian burger, the McAloo Tikki. McDonald’s Strange Menu Around the World

14. Germany It’s bottoms up in Germany, where McDonald’s serves – Beer! McDonald’s Strange Menu Around the World

15. CANADA In parts of Canada, have a lobster dinner with the McLobster lobster roll. Pardon me – “McHomard” (in French). McDonald’s Strange Menu Around the World

16. JAPAN Japan totally reinvents McDonald’s with its Ebi Filet-O (shrimp burgers), Koroke Burger (mashed potato, cabbage and katsu sauce, all in a sandwich), Ebi-Chiki (shrimp nuggets) and Green Tea-flavored milkshake! McDonald’s Strange Menu Around the World

17. NORWAY In fish-loving Norway, they have the McLaks, a sandwich made of grilled salmon and dill sauce. McDonald’s Strange Menu Around the World

18. HONG KONG Rice-loving Hong Kong, has – of course – Rice Burgers, where the burgers are in between, not burger buns, but two patties of glutinous rice. McDonald’s Strange Menu Around the World

19. Previous position & Challenges

20. CHALLENGES - Subway

21. McDonald’s

22. CHALLENGES – McDonald’s

23. MACRO ENVIRONMENTDemographic Environment * Age Structure • Young people become the target of fast food industry. • The younger the person, the more they eat out at fast food restaurants. *Working Woman The increasing number of working woman, makes the need of fast food service growing.

24. MACRO ENVIRONMENT (Cont.)Cultural Environment • The young people attend to eat together with friends or co-workers. • The raise of health consciousness. • The need of natural product and demand from customer for company

25. MACRO ENVIRONMENT (Cont.)Economic Environment • Families that have more money eat out more. • The larger the family, the less they eat out, but the times they do eat out, they visit fast-food restaurants more. • People spend more money on fast food than they do on higher education, personal computers, software or new cars. They spend more on fast food than on movies, books, magazines, newspapers, videos and recorded music - combined.

26. MICRO ENVIRONMENT Company – Top management

27. MICRO ENVIRONMENT Customer

28. Most of fast food companies have competitive marketing strategy globally to get the target - “Become the number one position in fast food industry” with healthy product. • Franchisee is one of the most popular meanings in marketing strategy. • Build up the large restaurant system as more as stronger. • List of fast food restaurants: • McDonald’s • Burger King • Subway • Pizza Hut • Yum! • A&W Restaurants • And so forth. MICRO ENVIRONMENT (cont.)Competitor

29. MICRO ENVIRONMENT (cont.)Media Publics

30. Subway Swot analysis-Strength 1.Image The essentials of the Subway “eat fresh” Image 2. Transparency of Preparation At Subway Restaurants you can see all ingredients YOU choose for your Sandwich. You can observe every step of preparation in front of you You are always asked for every single vegetable in order to focus you on the “live preparation” 3.Emotional and psychological items The colours and materials that are used for furnishing & the design elements of a Subway Restaurant are always natural: wood tones, brown, green and red

31. Its competitor, such as McDonalds, provide sophisticated service 24 hours open • focusing on people want to diet Opportunity • health eat style is a trend • In some country, subway is not very well-known Subway Swot analysis-weaknesses

32. Shops fast food appear more and more over the world • Competitor: Reduce price: McDonald’s retaliated by reducing the price of it burger to 99 cents in the US and 99 pence in the UK. Understand customer’s need: Jollibee in the Philippines, which had a similar business model to McDonald’s, offered adaptation, such as spicy sauces that appealed to the local markets Subway Swot analysis-Threats

33. New strategy to repositioning

34. Transparency of Preparation • All ingredients for your Sandwich. • Observe every step of preparation • “live preparation” • The nutritional information provided for insight and online Emotional and psychological items • The nature color materials: wood tones, brown, green and red • Subway Restaurant surrounding: eating food and fresh food. • Friendly atmosphere and a feeling of trust

36. Repositioning • Update the stores’ interiors • Open new Subway’s stores in US and abroad • Using the images of fresh tomatoes and other vegetables in New York subways system

37. Personality & Character Sports & Activities Associates Healthy Nutrition • MD sponsors lots of sports events and charity events • The engagement in indirect ads for a life style that MD identifies with. • Meeting point for young people who want to have fun combined with easy and fast food • Supporting various events MD uses the media to push its image and make the name omnipresent – no chance to escape • At MD the emotional “free like home” and “have fun” messages are dominant. • No transparency of preparation, BUT engagement and friendship giving the customer confidence concerning healthy food. • No direct “fresh” and “healthy” attributes in main advertisement – fact treated as an assumption

38. “Bag a meal” • “Who’s next basketbal” • “Sports” • “I am Asian” Some activities and PR campaigns in 2006

40. McDonald’s has improved their menus by adding up fresh green salad, which implies healthiness. Aside from this, they could adapt into the environment where they are in and give out tastes that could relate to different countries. Fast food industry has to supply various products and they are much more healthy. Due to fast food, people do not have to spend more as much time on making their own food, doing their taxed or travel. Fast food companies has been conducting marketing strategy to create new image and reposition for a global future. Franchise is a global system to build up a global brand in fast food industry. RECOMMENDATION AND CONCLUSION

41. Question Discussion

42. Answer: • Globalization is the system of interaction among the countries of the world in order to develop the global economy. • 2 main forces are driving it: • The development in fast technology • Condition of economy. Question1: What do you consider to be the definition of globalisation? What forces are driving its development?

43. Answer: Because the global strategies only focus on enlarging more and more stores over the world, this make a surplus to customer demand while they don’t focus on caring much about the change in eating tendency of customer . Question2: Identify the reasons why global strategies sometimes fail in their objective to achieve a global marketing advantage?

44. Answer: International Competition. Mergers can help firms deal with the threat of multinationals and compete on an international scale Mergers may allow greater investment in R&D This is because the new firm will have more profit. This can lead to a better quality of goods for consumers Greater Efficiency. Redundancies can be merited if they can be employed more efficiently Question 3What is the rationale behind mega mergers and major acquisitions? How will they lead to global competitive advantage?

45. Question 4What are the critical success factors in developing a global brand? What additional factors would you consider to be necessary in developing a successful global e-business brand? Answer: • Critical success factors: • adapting the strategy to country-specific situations • effectively communicating the brand across the world (both within and outside the organization). • Successful global e-business brand

46. Cultural and environmental differences are the main challenges that are faced by international managers in managing and controlling a global marketing strategy. Key words include eating habits, GDP, economic, political situation competition. For example, Different countries have different eating habits. The Chinese have a saying “Good things for breakfast. Eating a big meal for lunch but eating less at dinner.” Question 5What are the main challenges that are faced by international managers in managing and controlling a global marketing strategy? What advice would you give to a manager with this responsibility?

47. Many Americans agree that one should start the day with a good breakfast, but their ideas about lunch and dinner are different. Most Americans only give themselves a short time for lunch. So they eat a small lunch. After work they will have more time to eat a big dinner. Also a quiet dinner at home with all family talking about their day is a way to take a good rest after a long, hard day of work. The manager must monitor environments which impact consumer behavior very closely, in order to develop forecasts, goals, and plans for international activities. Con’t

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