Ways of increasing competitiveness

3. Emotional Branding

Rather than huge advertisements and image or brand awareness, branding boils down to how a product makes a customer feel and that is where emotional branding comes in and that is where the competitive edge also comes in.

It has been widely accepted for years that brands offer psychological and social benefits. These benefits go beyond the features and function of a particular product; they extend to the overall customer experience and the lingering psychological and emotional aspects of the brand.

Sometimes, customers’ decision to buy product or service does not base on appropriation, but it comes from the order from their right brain which controls feelings and emotions. Many times that customers decide to buy something that they can feel, touch more than strict with the quality, price, or what benefits they can get from that product. Fashion products seem to be good example in this case. If customer is just only interested in convenience and price, luxury brand like louis vuitton, channel etc would not be able to sell. Fortunately, millions of people are happy and proud when they are wearing Armani Shirt, Boss jacket and carrying Fendi bag.

 

 

4. Co-Branding

 

Co-branding or sometimes known as Brand Partnership, has background from western countries. One of the well known companies who used this strategy is the Tricon, an independent company, which owned and franchised the KFC, Pizza Hut, and Taco Bell brands worldwide.

By definition from www.wikipedia.org, “Co-Branding” is an arrangement that associates a single product or service with more than one brand name, or otherwise associates a product with someone other than the principal producer. The typical co-branding agreement involves two or more companies acting in cooperation to associate any of various logos, color schemes, or brand identifiers to a specific product that is contractually designated for this purpose. The main purpose of co-branding is to strengthen the product’s reputation or image in order to make it more sellable. Co-branding also increases awareness of the lesser known brands: Having a big brand appear next to theirs on the same product/service is like an approval from the big name.

Despite the increasing applications, the potential disadvantages associated with co-branding strategies are the risks and lack of control in consumers' perception towards the "new" co-branded product. Mismatch could occur when combining two brands, thus co-branding may affect partner brands negatively

 

 

 

5. Digital Branding

Due to these days is the era of information technology, the way of communication has been changed; fast internet creates new and fast format of communication especially through the social web and social media.  There is now a plethora of digital channels which can be used to hold a dialogue between a Brand and a Consumer, or groups of consumers. Digital Branding creates new opportunities for brand building; changes the way brands behave interact and speak. From animating brands across web and digital platforms to creating websites and social media expressions, designing applications and managing brand assets in real time.

To do the digital branding, you can consider some key issues such social media, Search Engine Optimization, and online advertising.

Social media has a huge impact on brands and how brands are marketed. As we can see that many brand name products or stores become the topic of discussion on Facebook, Twitter, LinkedIn, Google+, or any number of blogs. These brand impacts mark conversations in at least three ways. 1st Social media can help people involve more in Product Ratings and Reviews, for example of social product reviews, when several video began circulating on YouTube showing how to open a Kryptonite bike lock with a Bic pen. The videos caused Kryptonite, who was a leader in bike locks for over three decades, to redesign its product. 2nd social media has the impact to customer behavior which can certainly impact a brand’s reputation and last one is social media has effected to the innovation of brand market

Internet advertising is also another way to create digital branding opportunities across web properties your customer might be visiting and helps to increase its online visibility. Even though not all impressions lead to measurable success, they increase the exposure, regardless of what some might say about banner blindness. Marketers budget continue to shift to online advertising, social media and Search Engine Optimization, leaving many traditional publishers to rethink their business model.

 

1.5 Conclusion

In that part we have tried to examine different types of competitiveness and looked through various strategies. I we tried to give clearly definition and meaning  of a marketing strategy and name some of its advantages and disadvantages. We have also tried to pinpoint significance of branding in building an efficient marketing strategy and to mention all its types. The most important part of marketing is to build brilliant marketing strategy which consists of various parts and every point should be done in a proper way. I would like mention again about such important components of Sources of competitive advantage as Technology and innovation, Organizational structure, Cost Focus and of course, human resources. So, in increasing competitiveness of a product necessarily implies building a marketing strategy which consists of many points, and each point cannot be missed.

 

 

 

 

 

 

 

Chapter 2 Marketing strategy of McDonald’s Corporation

 

2.1 BUSINESS STRATEGY

 

Franchise model -  As per franchise model of McDonald s only 15% of

the total number of restaurants are owned by the Company. The

remaining 85% is operated by franchises. The company follows all the

framework of training and monitoring of its franchises to ensure that they

achieve good quality service, cleanliness  and value for the money offered by the company to its customers.

 

Product consistency - By developing a sophisticated supplier

networked operation and distribution system, the company has been able

to achieve consistent product taste and quality across the nations of the

world.

 

Act like retailer think like a brand - McDonald s focuses not

only on delivering sales for the immediate present, but also protecting its

long term brand reputation.

 

 

2.2 MCDONALD S MARKETING MIX (5PS) STRATEGY

 

After analyzing the market, finding the key factor, target segment and understanding the market demand, every company needs to come up with an offers or such type of plan, that speed up the growth of the company. For which McDonalds uses 5p s of marketing mix which are as follows:

1. Product
2. Place
3. People
4. Price
5. Promotion

 

PRODUCT:

Product includes that, how the company should design, manufacture the product so that it enhance the customer experience? Product is the physical product or services offered by the company to its customers. McDonalds includes certain aspects of its product such as packaging, desirability, looks etc. This consists of both tangible and non-tangible aspects of the product and services. McDonalds has purposely kept its product depth and product width limited. McDonalds had first studied the behavior of the Indian customer and provided a totally different menu as compared to its menu offered in International market. It removed pork, beef and mutton burgers from the menu. India is the only country where McDonalds serve vegetarian menu. Even the sauces and cheese used in India are 100% vegetarian. McDonalds continuously innovates its products according to the changing preferences and tastes of its customers. The recent example is the introduction of the Chicken Maharaja Mac and latest introduction of chicken style is Chicken Mcnuggets. McDonalds brings best product of quality and of best features as per the preference and demand of the target market.

 

PLACE:

The place mainly consists of distribution channels and outlets of the company. It is considered as very important because the product must be available to the customer at the right place, at the right time and in the right quantity. In U.S.A nearly 50% of outlets are situated within the distance of 3 minutes. There are certain degree of fun and happiness that McDonalds provides to its customers. It provides value position based on the needs of the customer. McDonalds offers proper hygienic atmosphere, good abidance and better services. Now McDonalds have also started offering internet facilities at their outlets, along with music system through radio, not the normal music but the music which is preferred by young generation in order to attract them. There are also games for children the one example is air hockey. Children play games till the time there parents spend quality time in McDonalds.

 

PROMOTION:

The promotional activities adopted by the McDonald helps to communicate efficiently with the target customers. The diagram gives idea about the promotion strategy of McDonalds. Application of above mentioned Communication Mix describes the cost that is feasible as per the consumers. McDonald's corporate used advertising, personal selling, sales promotion, public relations, and direct marketing and became world s largest leading Burger Empire. These five promotion tools are used by McDonalds to integrate marketing communication program which allows McDonalds to access the communication channels clearly, consistently and easily transfers messages and product to the target audiences.

 

SETTING THE PROMOTION MIX

An Advertisement is targeted to attract the masses it reaches to large number of people at a time. Advertising is one of the most important tools for promotion which had various ways of advertisement in that advertisement through billboards and media are often used by any of the business enterprise. Consumers mostly perceive goods which are advertised goods, as they assume it is more rightful. Due to distinct features of advertisement McDonalds also hold the hand of Advertising. There are three main objectives of advertising for McDonald s are to make people aware of an item, feel positive about it and remember it. The right message has to be communicated to the right people through the right media. McDonald s does its promotion through television, hoardings and bus shelters. They use print ads and the television programmes are also an important marketing medium for promotion. Personal selling is most effective tool for building buyers preference, convenience and actions. Personal interaction allows knowing for feedback and adjustments if required. If the organization had a good Relationship with Buyers they are more attentive towards personal selling. In personal selling McDonalds employees working in different outlets are the best example of personal interaction, the employees are directly serving the customers so, and the face to face communication is easily possible. In the McDonalds outlet there are such staff which are appointed for personal selling they are the one who perform the activities regarding selling up of goods to customers. Sales promotion activity consist of promoting the business unit through organizing various contest, programmes, functions, distribution of free discounts coupons etc that attracts attention of the customers, Also offers strong purchase incentives, dramatizes offers, boosts sagging sales Stimulates quick response; Short-lived; Not effective at building long-term brand preferences.

McDonalds organizes several sales promoting contest and programmes in different retail markets and outlets in which they distributes free discounts coupons. The statue of Mascot McDonalds is always there for any occasions that are also one of the logo of McDonalds.

 

Public Relations are also an important part of the McDonald's marketing strategy. The restaurant employees play a huge role in interacting with the public. On a day-to-day basis the employees commit themselves to customers and the customers' feelings toward the brand. McDonald's feels that before they communicate with their customers they need to be aware of what their competitors are communicating, so they can create a beneficial difference between themselves and the competitors. Many forms: Telephone marketing, direct mail, online marketing, etc.; Four distinctive characteristics: Nonpublic, Immediate, Customized, Interactive; Well-suited to highly-targeted marketing efforts. Direct marketing is also one of the efficient tools for promotion. The McDonalds uses tool in the home delivery services in which they directly serve the order to their home. Also they have a websites which are more in preference for direct marketing in that they usually mentioned all the new offers along with the contact number of your nearby outlets.

 

PEOPLE:

McDonald s understands the importance of both its employees and its customers. It understands the fact that a happy employee can serve well and result in a happy customer. McDonald continuously does Internal Marketing because if the internal marketing is effective it will automatically lead to in the success of external marketing. Internal marketing includes hiring, training and motivating employees. In

this way they can easily serve customers and the result will be the smiling faces of the customers. The level of importance has to be placed in the following order (the more important people are at the top):

1. Customers
2. Front line employees
3. Middle level managers
4. Front line managers

 

The punch line I m loving it ́ is an attempt to show that the employees are loving their work at McDonalds and will love to serve the customers.

 

ADVERTISING STRATEGY

There have been many McDonald's advertising strategy and slogans over the years. McDonald s is one of the most widespread fast food advertisers. McDonald's Canada's corporate website says that the business campaigns have always focused on the "overall McDonald's experience", rather than just product. The purpose of the image has always been "portraying warmth and a real slice of everyday life." Its TV ads, showing various people engaging in popular activities, usually reflect the season and time period. Finally, they have never in their advertising history used negative or comparison ads pertaining to any of their competitors; the ads have always focused only on McDonalds alone.

McDonalds has for decades maintained an extensive advertising campaign. In addition to the usual media television, radio, and newspaper, the company makes significant use of billboards and signage, sponsors sporting events ranging from Little League to the Olympic Games. Television has always played a central role in the company's advertising strategy.Today, McDonald's has used 23 different slogans in United States advertising, as well as a few other slogans for select countries and regions because slogans is also considered as important factor in advertising strategy.10

 

 

POSITIONING STRATEGY

McDonald s positions itself as the leader in quick service restaurants. In order to maintain their standard, they have started marketing to a younger set of persons, much in the same way that their I m Loving It ́ campaign does. They have send out FSIs (free standing inserts) as designed at the end of this report to ensure that their loyal customers will be motivated enough to try the new campaign even though they have always loved and used McDonalds. These FSIs will also act as a way to get customers who may have never been to the store. Users and non-users alike will use the Club McDonalds to their advantage. They expect that their younger target will seek out memberships in Club McDonald s. The online points-tracker and profile will add to the innovation factor. No need of paperwork when figuring out your point totals and prize eligibility. This is easy to use aspect of the promotion is appealing to those who were born with computers. Club McDonalds is targeted at younger people who are familiar with credit

cards and some of the rewards cards that are part of them.

 

 

CUSTOMER PERCEPTION AND CUSTOMER EXPECTATION

Customer perception is a key factor affecting a product s success. Many potentially changed products have failed simply because of their inability to build a healthy perception about themselves in the customer s minds. McDonalds being an internationally famous brand brings with it certain expectations for the customers.

 

 

 

 

 

TARGET SEGMENTS	VISITS MCDONALDS TO
A parent with 2 children	Visits McDonald s to give the children a treat.
Children s	Want to visit McDonald s as it is a fun place to eat.
A business customer	Visits McDonald s during the day as service is quick; the food tastes great and can be eaten in the car without affecting a busy work schedule.
Teenager	Hangout with friends, but keep it affordable.

 

Customers expect it to be an ambient, hygienic and a little sophisticated brand that respects their values. The customer s expect the brand to enhance their self-image. Customer responses obtained at the Vile Parle, Mumbai outlet confirmed the fact that they connect strongly with the brand. However, fulfilling some of the customer expectations like a broader product variety, provide McDonald s a great scope for improvement.

 

2.3 Competitive Strategy

 

OPERATIONS COMPETITIVE STRATEGY

McDonald s Corporation competes in a challenging market segment by providing need-satisfying products to customers. In this segment, ineffective competitors often fail without proper strategies. To sustain its viability, the McDonald s corporation employs an effective competitive strategy to make it stand out against competitors such as other fast food restaurants. McDonald s competes on several bases, including:

1. Cost
2. Speed
3. Nutrition

their strongest priority is 3making customers happy ́. The company recently made strong changes to its process by introducing the Made for You ́ system.

 

COMPETITOR S ANALYSIS

McDonald s has been a leading fast-foods outlet in Vile Parle. But the outlet understudy has other competitors eating away into its market share. In addition to its traditional rivals- KFC, Dominos, Pizza Hut - the firm encounters new challenges. Jumbo King competes using a back-to- basics approach of quickly serving up burgers for time-pressed consumers. On the higher end, the KFC has become potent competitor in the quick service field, taking away customers from McDonald s. Perhaps in the new environment, fast, convenient service is no longer enough to distinguish the firm. At this time, a new critical success factor may be emerging: the need to create a rich, satisfying experience for consumers. This brings us to service and experience based competition which McDonald s can use for competitive advantage against Jumbo King. Keeping in mind the demographics of the area, McDonald s has Wi-Fi enabled the outlet to cater to the student community. It is for this overall Food, Fun & Folks ́ experience that customers pay a premium over the other competitors.

 

COMPETITION BASES:

 

SPEED

McDonald s competes on several bases mainly to make their customers happy by providing speedy, affordable, and nutritious foods.Through extensive market research and survey, the organization discovered that its customers desire speed as one of the restaurant s top priorities. Therefore, McDonald s vision aims to provide fast, friendly and accurate service ́. McDonald s realizes that specific targets are necessary to measure the performance of speed, and continuously takes relevant measurements to compare actual performance with desired targets. To achieve efficient service times, the company utilizes proven, standardized training processes for its employees and new drive-thru layouts to reduce service times. Along with speed, McDonald s also competes by offering prices at a low cost.

 

COST

To offer high quality products at low cost requires efficient processes throughout the entire McDonald s organization. Once again, this goal is built into their vision statement when they claim that We will be the most efficient provider so that we can be the best

value to the most people ́. McDonald s incorporates several ways of approaching to provide great value to its customers. One strategy that the company has employed for many years is the value meal. The value meal allows customers to buy a sandwich, French fries, and beverage at a discount when purchased together. McDonald s restaurants offer from seven to twelve value meals, both for their lunch menu and breakfast menu. More recently, McDonald s began offering a value menu, consisting of many individual items costing only $1.00 each. First tested in southern California, the value menu has proved to be very successful and has been since incorporated to the individual stores. Some individual franchise owners choose to offer daily specials of special menu items, such as 3$0.39 hamburger Wednesdays, ́ or other similar

specials. Big Mac Mondays are a popular regional promotion.

 

NUTRITION

McDonald s third main competitive base is nutrition. The organization understands that health trend is an increasingly popular trend therefore; the organization has recently focused extraordinary efforts to promote their new nutritious choices. Although not specifically built into the organization s vision, McDonald s has already introduced many options to achieve this goal. In the United States, Go-Active ́ meals have been offered within the last few years. These meals include a salad, bottled water, and a step-o-meter ́ to help customers keep track of how many steps they take a day. Other countries have seen similar healthy options. The United Kingdom

saw fresh fruit bags, containing apples and grapes, as an alternative to French fries. Not only does McDonald s care about its customers, but it is also considerate of its employees health. In Europe, the organization worked with external nutritionists to develop an Employee Guidebook ́ which contains tips and nutrition information for healthy lifestyles. McDonald s has assembled their Global Advisory Council on Balanced Lifestyles. This council consists of exercise & obesity specialists, environmentalists, and other professionals to ensure that McDonald s takes appropriate steps in helping its customers achieve optimal health. The company is also utilizing technology to their advantage. The current McDonald s website lets a user select any combination of menu items, place the items in the online bag, and conduct a nutritional analysis on their selections. The user can break down the analysis even further than a menu item, down individual condiments, including ketchup; pickles etc. Not only has the company introduced many steps to ensure nutrition, but it will strive to continue the trend toward nutrition.  McDonald s plans to add additional healthy menu options (fruits and vegetables) increase nutrition awareness among McDonald s employees; conceive new ways to deliver nutrition information to its customers, and other actions.