Since the beginning of human civilization, places have been available for people to eat, drink, and meet away from home. In 1921, White Castle restaurant introduced the concept of fast food in Wichita, Kansas, offering quality hamburgers prepared in open view (Wilson, Unkn). By the 1960s, several fast food restaurants began serving across the nation, including Burger King, Kentucky Fried Chicken, and McDonald’s (Wilson, Unkn). Eventually, fast food became so common that “…by the end of the twentieth century…96% of Americans had visited McDonald’s at least once” (Random History. om, 2009).
Today, fast food restaurants help form urban and rural communities and reach billions of customers daily, worldwide. However, despite the popularity, people have begun to realize the consequences of repeated fast food consumption. University of Minnesota School of Public Health researchers have examined the eating habits of residents in Singapore and found new evidence that a diet heavy in fast food increases the risk of developing Type Two diabetes and coronary heart disease (University of Minnesota, 2012, p. 1).
Health care costs and rising ailments have prompted more people to think about what they put into their bodies. In accordance with healthier thinking, fast food restaurants need to evolve enough to meet the latest demands or prepare for the end of a leveling business cycle. To maintain status and build on the introduction of healthy salad and yogurt options, McDonald’s proposes expanding and delineating a comprehensive, wholesome menu. Marketing Research Study To understand the demands of a somewhat unfamiliar market, McDonald’s needs to conduct sufficient research, beginning with past and current customers.
Over time, generations scaled back dependence on McDonald’s as a regular food option. Adults who learned from years of fast food abuse still gather at the popular restaurant for social and economic reasons. Busy parents also continue to give into the excited juvenile requests for McDonald’s food because of the speed, value, and child-friendly atmosphere. Nutrition is rarely considered in the typically rushed visits to McDonald’s. The popularity of McDonald’s is implicit and customers recognize the effort to provide healthy alternatives to its regular menu.
The chain posts nutrition data in various forums; however, the information is useless when speeding through on the way to an event that already started. The objective of the proposed research is to understand if past and current customers would take advantage of healthier options if the options were more prevalent and detectable. Background colors or obvious symbols could provide quick, undisputed data for diabetics, people with allergies, and fitness gurus. The reason to include past client information is to understand if earlier attempts would have maintained valuable diners.
A focus group of people who ate at McDonald’s more than once should provide the data needed to pursue the venture. Some questions that can be asked of participants are as follows: * Would you eat something from McDonald’s if it were still quick, inexpensive, and healthy? * If you were able to easily recognize healthy options for your children, would you be more likely to order those options? * If you were diabetic, lactose intolerant, or suffered from a gluten allergy or condition would you dine more often at McDonald’s if you could recognize quickly the options available for you?
Marketing Strategy McDonald is one of the largest fast food chains in the world serving over 68 million customers in 119 countries daily (McDonald's, 2012). However, a substantial market is overlooked: health conscience people. Today more consumers are aware of the effects of an unhealthy lifestyle and tend to avoid fast food, while others are required to follow strict diet guidelines. In an effort to reach all clients, McDonald’s is proposing to offer freshly made Muscle Milk Protein shakes.
The shakes would be made to order so patrons could drive through and order the ingredients preferred, such as milk instead of water or vanilla instead of chocolate. Selling protein shakes at McDonald’s is a very viable solution to reaching busy active individuals, vegetarians, and those recovering from illness or injury (LiveStrong, 2012). The need for healthy food with fast food convenience exists, and offering Muscle Milk will suit the needs of those individuals wanting more protein, strength, and sustained muscle mass.
Muscle Milk provides a precise blend of 25 grams of premium protein, healthy fats, good carbohydrates, and 20 vitamins and minerals in lactose- free, gluten-free formula. Muscle Milk RTD is an ideal nutritional choice whether you are a performance athlete, or on a diet or simply desire to maintain lean muscle mass (CytoSport, 2012). These are delicious, healthy shakes made fresh to order with Muscle Milk Naturals powder. Each shake can be made with water, milk or juice depending on the customer’s preference. Flavors are Natural Vanilla, Real Strawberry, and Real Chocolate.
This formula contains zero artificial sweeteners or flavors and has Lo Han Fruit Extract and Stevia as natural sweeteners. Another option for customers is to have shakes made with Muscle Milk Light. Muscle Milk Light has 35% fewer calories; however, is not lactose or gluten free. Muscle Milk Light supplies low lactose nutrition and also comes in appealing flavors. McDonald’s marketing segment aims at pleasing children, youth, and young urban families (Ceneb Theme Lab, 2012). While McDonald’s continues to target that demographic, they are losing individuals who would enjoy eating there if products were more nutritious.
For many, protein shakes are great but going to McDonald’s to get one is not currently an option. McDonald’s existing drinks do not meet the requirements of health enthusiasts, but McDonald’s does offer easy access and a good delivery system. The protein shake would help change McDonald’s image from not just fast food but also healthy food for all life styles. [McDonald’s] has learnt over the years that they cannot feed the typical American taste for a long time and still attract customers, and their market growth will depend only on inclusion of new flavors and choice of menu.
Going international was not that challenging for them the key challenge is to remain at the top with major market share and to attract more and more customers by giving them the values they care for (Hammond, 2011, p. 1) One simple Muscle Milk protein shake added to the menu would speed up acceptance by customers (LiveStrong. com, Sept). In today’s market people are more conscious of what they consume. Offering Muscle Milk Protein shakes reaches those individuals looking for a product at McDonald that is nutritious, healthy, and tasty.
McDonald’s serving Muscle Milk will change views of the fast food chain to a healthy beverage that can used to supplement a meal. McDonald’s Muscle Milk Shakes will not only meet eating preference but will also boosts sales. According to the Entrepreneur web site, competitive analysis requires, “Identifying your competitors and evaluating their strategies to determine their strengths and weaknesses relative to those of your own product or service” (Entrepreneur, 2012, p. 1). McDonald’s has several competitors but none offer Muscle Milk. A consumer can purchase prepared 11-ounce Muscle Milk shakes from Walmart. om for $6. 28 per 4-pack (Wal-Mart, 2012). However, Muscle Milk powder is currently only sold at reliable retail outlets, such as GNC. The history of fast food chains concentrates on providing prepared food at unparalleled speeds, where-as nutrition stores focus on products that create optimal health products at retail store conventions. McDonald’s dominated the United States fast food market for half a century and expanded to international markets in the late 1960s, at times relying on foreign sales to support sluggish domestic ones (James, 2009).
McDonald’s international success is attributed to the company’s ability to adapt to differences and demand. For McDonald’s to introduce Muscle Milk in the foreign market, the company needs to identify the most health conscience locations: Singapore, Italy, Australia, Switzerland, and Japan (Bloomberg, 2012). Because the top four health-conscience countries are also McDonald’s locations, introducing the Muscle Milk theory internationally is straightforward. McDonald’s can launch he Muscle Milk option in Australia because it is the most profitable international, health-conscience location known by both McDonald’s and Muscle Milk users (McDonald's, 2012). McDonald’s domestic and international success is attributed to the company’s view on sustainability. McDonald’s believes in top customer experiences, local suppliers, ethical practices, and environmental awareness (McDonald's, 2012). Sustainability is very important to McDonald’s culture and maintaining or enhancing practices and policies will be basic and within corporate guidelines.
McDonald’s also holds high-regard for corporate social responsibility (CSR) so this coupled with the company’s culture will result in strong sustainability outcomes (McDonald's, 2012). McDonald’s introducing Muscle Milk to its existing high-calorie and poor nutritional options would place the business in a changing light. Consumers are changing and businesses need to acknowledge and act appropriately. Health conscience people would contribute to McDonald’s already solid bottom line. Both McDonald’s and Muscle Milk are established, profitable businesses, so a partnership would increase brand recognition and victory for both.
Distribution Channels and Pricing Strategies Many corporations operate domestically and internationally, there are many factors that determine if a company will become a global force. The one focus it he product that the company offers and price. A good product may make sense and be on demand around the world, but if the market cannot afford to purchase the product at a price a price that allows the company to earn a profit it would not make sense to sell in that market. The cost of doing business changes from one market to another due to the cost of the distribution channels and the government regulations concerning sales.
Normally a company will not penetrate a market immediately but over time and in stages. The internationalization process has four stages. First there are no international export activities, second export via independent representatives, third establish one or more sales subsidiaries, and forth establishment of production facilities abroad (Kotler, P. , & Keller, K. 2006). In the beginning the first thing to do is to do market research and gauge the possible market demand for the product and the financial ability of the market to purchase the product.
Lucky for the McFit Shake McDonalds is already an established industry and most of this data will already be available. After identifying the target market and the proper consumers some establishments will be identified as potential test markets. When entering these markets and selling the McFit Shake, price is important and great lengths should be taken to ensure the proper price is set to allow product success. This should also be coupled with a proper promotion of the product in the selected locations. Distribution channels in a domestic and international market
McDonald’s is a world leading fast food chain that had changed the way people eat. When McDonald began in 1940, their primary focus were to “Expand at all cost” meaning to open as many distribution channels as fast as they can produce (McDonald’s, 2001). Since then McDonald has taken its products and services by storm domestically and internationally. Before, McDonalds decided to expand their business into foreign market they took all consideration to develop a strategy that will generate and maximum profits and gain success in foreign countries.
In this strategy McDonalds focus were to produce more franchises, and partner with local company owned restaurants and establish joint ventures. This method allows management to rely heavily on how consumers will receive the new style of eating in unaccustomed markets. McDonald initially entered international markets by leveraging standardized product offerings, clean and bright environment, and American band equity (Ganapathy, 2009). One of the ways McDonalds adapted to local regions is by remodeling its retail space while changing the product line to appeal local tastes.
Meanwhile, McDonalds adapting to each country they enter as a way of catering to both local tastes and changing the restaurant’s design and appeal which is causing the brand equity to become dilute brand equity (Ganapathy, 2009). McDonalds is located in many countries and they have a lot of choices of food just as in the United States. In order for McDonalds to be successful it needs to focus on its strength of fast food. Fast food is the core competency of McDonalds and McDonalds can cater to locals as long as it focuses on its core competency (Ganapathy, 2009).
However in Europe McDonalds is losing its focus and beginning to compete with other lines of industry such as coffee shops and offering a diverse menu. Most people who go to McDonalds are just looking for fast food and being meet with local foods and coffees. Instead of the grab it and go mentality it is becoming more of a sit down and dine in restaurant. Even in American restaurants today McDonalds seems to be changing its brand image and it interior decoration.
They offer more coffees like Starbucks and even some McDonalds have fire places that give people the cozy feelings to stay in and eat. While this may be profitable to regain lost market share in the short run, it is a dangerous strategy in the long run (Ganapathy, 2009). Our Marketing team has decided to offer Mcfit Muscle protein shake to the international market because majority of McDonald’s distribution are making more than the domestic markets. In the past couple of years, McDonald’s has been lagging in sales in the domestic market and booming sales in the international market.
When introducing this product to international market we have to take into account the cultural differences, customer target differences and the fact that the product itself being marketed might not even exist in the company’s core message (Ganapathy, 2009). It is important that we present our product to the domestic market first before preceding to distribute our product to the international market, because it is important for our team to be able to identify our target customer before offering our product to other distribution channels and also letting us know if we have a market for our product.
Domestic Market McDonald’s offers new and seasonal items often so intelligent pricing strategy is a part of what keeps the company thriving. If McDonald’s had not offered value meals at the onset of the recent recession, the business could have incurred significant losses (Ecuatoriall, 2012). McDonald’s marketing strategists analyze factors that could affect the success of a new product. In 2011, commodity costs forced McDonald’s to increase prices up to 4. 5% in the domestic market so avoiding increases after the McFit shake introduction would result in greater consumer confidence (Stagnito Media, 2011).
McDonald’s could use basic price setting strategies to determine the domestic cost of the McFit Shake, such as determining the objective, demand, costs, and competitor response (Kotler & Keller, 2007). The objective of the McFit shake is to reach a new customer base, demand will come from convenience, costs will be analyzed to determine profitability, and competition will expand. McDonald’s has several competitors for current menu items but competition will shift when offering a fresh-made protein shake. Currently, any retailer that sells protein shakes becomes competition.
A consumer can purchase prepared 11 fluid ounce Muscle Milk shakes from Walmart. com for $6. 28 per four-pack, or $1. 57 each (Wal-Mart, 2012). Muscle Milk powder also can be purchased from GNC stores for $53. 99 per 4. 94 pound container. The user has to mix his or her own shake and cost for the same serving as the prepared Wal-Mart shakes is $1. 68 each (GNC, 2012). Because McDonald’s customers look for value and convenience, whereas leadership requires profit, McDonald’s should introduce the McFit shake to the domestic market at $1. 70 for a standard 11-ounce size.
The price, size, and quality of the protein shake needs to attract customers who rarely, if ever, visit McDonald’s restaurants, so the price of convenience should be low enough to complete with top retailers of protein shakes. International Price Strategies Markets bring together buyers (demanders) and sellers (suppliers), and they exist in many forms” (McConnell, Brue, & Flynn 2009). One very imperative and possible the most fundamental element comprised in the marketing process is price strategy. “Price is an obstacle from the standpoint of the consumer, who is on the paying end.
The higher the price, the less the consumer will buy. But the supplier is on the receiving end of the product’s price. To a supplier, price represents revenue, which serves as an incentive to produce and sell a product. The higher the price, the greater the incentive and the greater the quantity supplied” (McConnell, Brue, & Flynn 2009). In order to gather the best price strategy and avoiding a negative impact on the bottom line, research is necessary along with a comparison of all available pricing strategies. Implementing the rule of supply and demand is essential when determining a price strategy.
Additionally, estimating the demand curve is equally important. “A fundamental characteristic of demand is this: other things equal, as price falls, the quantity demanded rises, ad as price rises, the quantity demanded falls. Demand is a schedule or a curve that shows various amounts of a product that consumers are willing and able to purchase at each of a series of possible prices during a specific period of time. Demand shows the quantities of a product that will be purchased at various possible prices, other thins equal” (McConnell, Brue, & Flynn 2009).
Menu prices for McDonalds change per location. An average price for a large shake at McDonalds is $2. 59 for a large, $2. 29 for a medium, and $1. 89 for a small shake. Online prices for Muscle Milk powder varies in price and size from GNC, the Vitamin Shoppe, and Cytosports websites. The Vitamin Shoppe has a price of $53. 28 on sale for a 4. 96lb of Muscle Milk powder with a regular price of $100. 99. GNC charges $53. 99 for a 4. 96lb container of Muscle Milk powder on sale and a regular prince of $99. 00, while cytosports. com charges 48. 49 for a 2. 7lb of powder or $185. 99 for a 10lb bag. The 10lb bag is a new offer and makes 129 servings per bag. Purchasing 10lb bags from CytoSports website is the most cost efficient. Knowing the average price of a McDonalds shake and the cost of Muscle Milk the best international price of a McDonalds McFit Shake infused with Muscle Milk would be in the same ballpark of a regular shake but more costly due to the purchase of the powder. McDonalds McFit Protein Shakes infused Muscle Milk would have an international cost of $2. 19 for an 11oz shake. Communications Plan
Marketing is an essential part of the business plan that takes into consideration many factors like demand, market share, target customer, and strategy. The communications plan addresses here the means and rationale that McDonalds should inform the public of this new product, the McFit Shake. By assessing the factors involved, the advertising and marketing strategy can be developed and implemented effectively in domestic and international markets. These are important parts of effective commutation that will take many forms for the purpose of creating market awareness.
An awareness that will communicate the product and the desire it satisfies within the existing market. Assessing Factors The market in today’s era is constantly changing to tailor the needs and wants of consumers. To avoid risk of declining sales and failure, companies have to remain competitive and communicate effectively. It is of urgency to clasp innovation and never to become complacent with product development. Organizations use communication to launch its voice and product which in turn defines its success.
Normative standards must be researched and defined to provide direction for establishing the ideal marketing mix, including advertising, sales promotion, company-sponsored events, public relations, consumer involving events, public relations, consumer involving events, and the right combination of direct marketing and personal selling (Kotler & Keller, 2007). New product markets does come with risks, therefore marketing must breed consumer feedback and enthusiasm as well as grow demand for the product.
A company’s marketing budget is a huge component as it pertains to communication channel development. Advertising budgets are typically wrapped around the goals and objectives of a company. The objective and task method is a method of allocating funds to advertising. This method requires the advertising budget to reflect the desired result and the promotional tasks (Chron, 2012). Good planning and control of marketing communications depend on measures of effectiveness in achieving the desired objectives in terms of consumer awareness, knowledge, or preference (Kotler & Keller, 2007).
Advertising for the McFit Shake infused with Muscle Milk will consist of preliminary testing first to decipher whether or not the ads are communicating the shakes properly. Upon a pre-trial run of advertising, the McFit Shakes advertisements will be followed by post-testing, which determine the efficacy of the communications pretrial campaign. Advertising and Promotion Programs McDonald’s offers a variety of products to entice even health conscience consumers, such as salad and yogurt. However, offering the McFit Shake puts the business in an entirely new market, one that needs to be reached creatively.
McDonald’s does not want to alienate current customers by over-advertising the healthy protein shake and giving the perception of continued menu changes. To cover what to say, McDonald’s will emphasize the taste and mix varieties of the McFit Shake instead of the health factors (Kotler & Keller, 2007). Some people may start drinking the McFit Shake simply because of the taste. How to reach potential customers who currently choose to avoid McDonald’s is probably the most challenging advertising strategy because these clients currently have no interest in the place or products (Kotler & Keller, 2007).
The McFit Shake should be advertised through mass media, such as television, billboards, social media, and precursors to streamlined or downloaded video. McDonald’s would also benefit greatly by holding promotions in gym’s, weight loss centers, grocery stores, health food stores, and at team events, both professional, and amateur. The company should also stage promotion representatives for the venue he or she will attend, such as a body builder in the gym, and slightly over-weight mom at a weight loss center.
The advertising and promotions should solve, “…three problems: what to say…, how to say it…, and who should say it…” (Kotler & Keller, 2007, p. 284). Communications Strategy The marketing communication strategies that will be implemented to offer the new product to McDonald’s domestic and international distribution channels. Will first offer Mcfit Protein Shake locally then based on the response we receive from local customers McDonalds will proceed to market our product internationally. Communication strategy it is important for targeting customers before McDonalds begins to advertise and promote our product.
Being able to identify the target audience will help communicate the product to potential customers to make the right decision to purchase the Mcfit Shake. The Mcfit Shakes are geared toward customers who are health conscious, a person who live an active lifestyle, a person who needs to maintain a level protein, or a person who needs something that will do the job for them early in the morning or evening. In the USA today people have become health conscious about their weight and the food they consume in their bodies. The USA was rated as one of the fifth highest obese countries in the world, 32. % of our country are classified as obese (Hibma, 2012). Because people are no longer preparing their foods at home, they are running to fast food restaurants to eat breakfast, lunch, and dinner. This has been an epidemic for years now, and people are becoming more aware of the conscious it brings to their overall health. One of the main reasons why people are taking more responsibility for their health is that they are developing type2 diabetes, high blood pressures, high cholesterol, and other factors from unhealthy eating.
People are developing busy lifestyles that leave our children ordering off our dollar menus because mother or father is too tired to make dinner. Families became less active meaning lack of exercise and kids are reducing the amount of time playing outsides but compare to other countries such as Japan. The difference between offerings our product domestic and international is that in some countries may need a protein shake frequently verses other international countries. Customers in Japan may not need to purchase our milkshakes product compared to offering the milkshake here in America.
Offering the Mcfit Shake from McDonalds will give customers a more comfortable feeling about eating at McDonalds because they are offering more selections on the menu that are nutritious and healthy. Compared to international customers will need to purchase our Mcfit Shake for other reasons like to build endurance, or boost customer’s energy after working out or replace a meal. This why it is important for us to promote or advertise our products through word of mouth, media, and billboards in our international and domestic markets leaving consumer to feel a sense of pride about eating at McDonald’s.
McFit Budget and Finance New Product McDonalds sells many new products during a limited time promotion (United States Securities and Exchange Commission, 2012). Only predictions can be made on if the products will sell enough to stay full-time. Many factors must be taken into account when developing a marketing budget and the costs involving a new product launch. Since we can only predict sales and forecast the future based on similar projects and estimated demand, the McFit will have to be compared to the a similar product launch to best predict its budget.
Similar healthy products that were launched recently at McDonalds are the oatmeal and fruit parfait (TREFIS, 2012). The Oatmeal is 100% wholegrain and regionally sources so they are never frozen, a health option for kids only 290 calories. The Fruit and Yogurt Parfait is 160 calories but it is not the healthiest item on the menu (McDonalds Pushing Health with New Oatmeal, 2012). McFit Shake will continue the effort of McDonalds to manage its image of health and forecast its cost similar to these other two products since they are comparable.
In 2011McDonalds continued to focus on customers and deliver high quality food and saw it profits sales increase worldwide an average of 5. 3%. This increase was due to many products two of them are the oatmeal and fruit parfait. If we divided the 5. 3 by the number of new products, including McCafe premium hot chocolate and Caramel Mochas, the popularity of Chicken McNuggets, and the national launch of Fruit & Maple Oatmeal, that all contributed to sales results (corporate-ir. net, 2011). Five point three divided by five products is one point zero six (5. 3/5=1. 06).
So we can say do a degree that if oatmeal or fruit parfait was comparable to a health shake than it would increase sale 1. 06. At the McDonalds main site there are one hundred and seventy items sold at McDonalds when counting the entire list (McDonalds, 2012). Much of the advertising of the advertising of McDonalds products are done in the same form and fashion and costs are shared across the business itself. To find the actual cost for an item we have to look to the financial statements of McDonalds and divide the costs by 171 to find the costs possibly related to each individual product as an estimate plus one.
Once we have the costs related to the Item and the costs possible revenue forecasted we can begin to come to a marketing and cost budget. Following the same format we can also come up with forecasts for each quarter and predict McFits contribution to profits and costs. 88% of the costs will go to the protein mix and 2% will be for materials like cups and straws, and 10% will go to the existing McDonalds marketing mix and existing channels of mass communication see appendix A. Conclusion The United States is in the middle of a national health concern and in the center of that is the fast food industry.
Many consumers see the industry and it participates like McDonalds negatively and a cause for the current issues, if not that at least a means to obtain unhealthy food. Healthy active people should not have to choose form only fast food that lacks nutrition and vitamins. Active children should not be just eating fries and hamburgers, but they also want something that tastes good and fast. The McFit Shake does fit this situation and can change the perceptions of the public about McDonalds.
That why our marketing suggested the Product Muscle Milk created by CytoSports is a great shake that does the job of making people feel good in a way that they do not have to feel guilty. Anyone can get one of these shakes known as the McFit Shake fulfills the revitalizing need for protein and nutrition. Maybe the market for the Mcfit Shake is just not domestic but also international and protein shakes will be soon penetrating the global market at the right price for those who can afford it. Domestically McDonalds should offer these sakes for $1. 70 for an 11oz shake and internationally $2. 19 for an 11oz shake.