comparison of afc & mcdonald

8/8/2019 Comparison of Afc & MCDONALD

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Global Marketing project

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Comparisonof Fast FoodRestaurants


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Project by: Sir ShujjaPrepared by:Umar yasinRehaan AtharArooj RiazHina NawazAmmara Mubashar

Submitted on: 5th July 2009Pmas-University of Arid AgricultureRawalpindi.


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McDonalds


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COMPANY DESCRIPTION .Established in California during the 1940s by two brothers,

the McDonalds restaurant became a popular teen hangoutin the first flush of post-war affluence. To feed these youthfulbodies, the brothers reduced the menu to the perennial favoriteshamburgers, applied assembly line techniques to food production andexpanded to four restaurants by 1953.Taking note of the brothers success, in 1955, Entrepreneur Ray Krocbought the right to franchise the McDonalds System. Renamed theMcDonalds Corporation in 1960, Kroc focused his marketing effort onthe family meal and children, spending heavily on television

advertising which promoted the smiling clown face of its child-friendlybrand mascot, Ronald McDonald. Today, the McDonalds franchiseexceeds 30,000 restaurants globally and serves over 50 millionpeople in more than 121 countries each day.

GOALS AND OBJECTIVES .1. McDonalds vision is to be the worlds best quick servicerestaurants experience.2. McDonalds is committed to maintaining and developing the bestfood products in the quick service restaurant market.3. In order to deliver this, the company has made a number ofcommitments to food safety and nutrition.4. Lead the Quick Service Restaurant market by a program of sitedevelopment and profitable restaurant openings, and by attractingnew customers. Increasing sales through promotions will enable them

to continue their program of expansion.


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5. McDonalds have an objective to continual enhance and improvetheir menu. This will better satisfy their customers and give customersmore reason to visit. Many ideas for new items on the menu comefrom the franchisees responding to customer demand.

6. Consumer tastes change over time and McDonalds has to respondto these changes.

MISSION STATEMENT ."McDonald's vision is to be the world's best quick service restaurantexperience. Being the best means providing outstanding quality,service, cleanliness, and value, so that we make every customer inevery restaurant smile."

COMPETITIVE ADVANTAGE .McDonalds core competency is providing convenience when peopleneed and want to eat fast food at prices that are competitive andprovide best value for the customersmoney. One of McDonaldscompetitive advantages is its focus on consistency of quality,production of food and use of raw materials all around the world. Theworld recognition associated with the brand McDonalds itself is alsoone of McDonalds competitive advantages.


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Demand Trends .There are many variations observed in the demand trends forMcDonalds in Pakistan. The trend followed by the high income groupis relatively stable and they comprise a very small percentage. Thechanges in the economy have very little effect on the demand trendsof McDonalds that is being followed by this high income group.Other reasons for these variations are:

McDonalds is a brand that is mostly perceived by an averagePakistani customer to be a place which is visited on some occasionor once in a while. The main reason for this is the low disposableincome that people have because of the inflation and some other

unemployment reasons.

On the other hand McDonalds lovers such as college students,working individuals, kids and families fond of spending a lot on fastfood restaurants make it a place to be visited very frequently. One ofthe reasons is high disposable income by blue collar individuals.Another reason is the attraction for McDonalds by kids as well asthose who love it for every reason.

There are also global issues which affect food demand forMcDonalds e.g. bird flu and cow diseases in western countriesbrought down demand for McDonalds some years ago as it was aknown fact that they get their meat from international suppliers inorder to maintain quality.


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Key Success Factors :McDonald's Pakistan has an aggressive plan to expand in all othercities of Pakistan and is rapidly growing with the focus to providefriendly and a quick service restaurant experience to its customers.There are many key success factors due to which McDonalds issuccessful in the market. We have been successful in identifying afew:All the franchises of McDonalds in Pakistan are owned by LaksonGroup of Companies. Apart from the fact that LGC is one ofPakistans biggest corporations, their management allows not only

standardization of quality but a more uniform and effective marketingstrategies in order to sustain in the market.Therefore McDonalds being its part had to continue to strive tomaintain its standards in the local region.Many McDonald's restaurants have included a playground forchildren and advertising geared toward children, and some havebeen redesigned in a more 'natural' style, with a particular emphasison comfort: introducing lounge areas and fireplaces, and eliminatinghard plastic chairs and tables. This has given a new outlook to theMcDonalds as a quick service restaurant that is still not be seen on

other fast food restaurants.McDonalds doesnt offer just burgers. Their well diversified menu isalso one of the key success factors as most of McDonaldscompetitors are quite specialized: KFC in chicken, Pizza Hut in pizzasetc. When it comes to eating out during Ramadan in any fast foodrestaurant, the name that clicks to the customers is McDonalds. Thereason is the affordable deals that they offer, that seem to beat allothers when it comes to prices. Another advantage that McDonaldshas on its competitors is the location of its franchises.


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Its main advantage is that it is located in vicinity that is easilyapproachable. Secondly it has got in its surroundings other veryattractive places to be visited by people who want to enjoy their life tothe full. These places are a source of attraction not for the servicesthey provide but for McDonalds as well. For example one of itsoutlets has been opened in Park Towers in Karachi so as to attractthe shoppers who visit it very frequently. Another strategic locationthat McDonalds has acquired is at the Clifton beach. This has forcedmany others nearby restaurants and one of the very famous cuisinerestaurants with the name of Kublai Khan to get closed. Same is thecase in Rawalpindi/Islamabad where McDonalds holds an importantstrategic location. The customers that are driven to the Cinepax areautomatically attracted towards McDonalds.

Product life Cycle Analysis :

In the Pakistani market McDonalds has been placed in the growthphase as it is still growing and has the potential to grow further. Thereare many strategies that have been employed in the other countriesbut are still to be made a part of the McDonalds franchises in


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Pakistan. Following are some of the strategies that can be made apart of the Pakistani market so as to increase its market growth:

a) McDonalds in Pakistan can introduce breakfast in its menu tocater to the needs of those who are in a hurry to get to office in time.This will give them an edge on its competitors and its growth willincrease.b) To gain advantage in the local market, McDonalds shouldintroduce coffee at all the franchises.c) To maintain its brand image as a twenty four seven customerrestaurant, McDonalds must make its timings more flexible to theneeds of those who are usually very busy with their work schedules.

BCG Matrix :

According to BCG Matrix McDonalds is a star. The reason for this isits high market growth and high market share in the Pakistani market.On the other hand KFC and Pizza Hut are the cash cows because of


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their low growth rate and high market share. During past some yearsKFC and Pizza Hut have lost their market growth because of the factthat they lost their standard war to their competitor i-e McDonalds.Another direct competitor of McDonalds is AFC. According to BCGMatrix it is question mark. Some of the reasons that are responsiblefor its low market share and low market growth are the lessexpansion strategies being followed by the company. Secondly theyare not focusing at all on all the major cities, rather they are onlyfocused on the target segments of large cities.


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SWOT ANALYSIS .Strengths:

McDonalds has been able to maintain its market share in theQSR market of Pakistan since 1998 and this is actually the major strength ofMcDonalds that has made it so popular. Other major strengths are listed below:

Products:A major strength is the various deals that McDonalds offers so that it could be

made affordable. Recently McDonalds offered a deal for Rs.85 only, containing abeef burger along with a drink. McDonalds offers many flavors of Mcflurry icecream from a mix of M&Ms to Oreo cookies. The M&Ms flavor was introducedabout a year back and is still popular among the M&Ms lovers. McDonalds hasalso customized its meal according to the tastes of Pakistan. People in Pakistando not eat bacon so McDonalds does not offer such sort of meals in the country.

Brand Recognition:McDonalds has gained recognition worldwide. The chain is present all over theworld in more than 122 countries. In Pakistan a large number of franchises are

present, majority of them in Karachi and Lahore and McDonalds is regarded as asymbol of value and quality for your money.

Party celebrations:McDonalds offers its clients, especially children to celebrate their birthdaysthere. One can invite friends, they decorate the party area, various party gamesare organized along with face painting activity etc. Children are provided with anopportunity to celebrate their day in the way that they want.


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Partnership with Coca Cola:McDonalds and Coca Cola are official global partners. Coca cola is a big brandname serving people all over the world with beverages.

Partnership with telecom companies:McDonalds offered special deals to its clients with up size meals who are theusers of a particular company such as Warid and Ufone .

Weaknesses

Product Variety:McDonalds needs to develop more and more products to stay in the competition.After the opening of international QSRs in Pakistan, many local QSRs have alsobeen opened in various cities. The tastes are a bit different but they too areoffering chicken and cheese burgers, drinks and fries at competitive prices. Thissituation requires McDonalds to be more innovative and price competitive.

More advertising:In Pakistan, McDonalds rarely advertises at TV, howeverbillboards often show

off juicy McDonalds burgers but this could affect its popularity in future. Itdefinitely needs to advertise more to reach the target and the potentialcustomers.

Drive-Thru:The service at McDonalds drive-thru has been subject to criticism all over theworld and a lot of people complaint that the orders are either missing some of theitems or are entirely wrong. The service time at the drive- thru is also subject togreat variations and needs to be improved.


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Opportunities

Reasonable Prices:McDonalds can broaden its market by offering meals at more competitive pricesin comparison to other local QSRs such as AFC, Pappasallis etc. This way itcould get hold of the potential customers too.

Opportunity to be innovative:McDonalds could make itself more innovative by offering deals that appeal moreto Pakistani consumers e-g it can introduce desi flavors in the present productssuch as Barbeque, Tandoori, Masala and other spicy tastes which are staple ofthe country.

Breakfast and special noon meals:Now in Pakistan most the trend of women going to work and opting for professionis increasing as a result of which they are running short of time to carry out all thehome chores along with their work. McDonalds can offer deals to such market bycatering them in the morning for breakfast. During the office hours people mostlygo out for their lunch to restaurants. McDonalds can avail this potential markettoo.

Growing dinning out Market:In Pakistan the dining out trend is increasing especially in youngsters and uppermiddle class. McDonalds has the opportunity to grasp this market quite well. It isalready doing well by serving them but it could arrange various activities for thepeople of this age.

Dine in Cafes:McDonalds can open up with small-sized cafes for the teenagers in their

universities and colleges.

McCafes:McDonalds has opened coffee shops by the name of McCafes in UK. Pakistancan serve as a new potential market for these cafes.


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Threats:

More health conscious customers:With increasing awareness about food and the importance of a balanced diet,people are opting for low calorie food e-g salads and food with high fiber content.To remain in the scope, McDonalds needs to serve this market as well as thepresent customers, this could be posed as a threat to McDonalds. Subway isoffering its low fat veggie and chicken sandwiches at prices almost the same asMcDonalds. For McDonalds diet meals could be a way out of this situation. Untilnow, McDonalds in Pakistan has nothing to offer to health conscious customers.

Foreign as well as local competitors:In the growing market QSR market of Pakistan McDonalds competitors areentering not only from other countries but from within the country too. Theircompetitive prices could be a reason due to which McDonalds can lose its sharein the Pakistani market.

Changing customer styles:Pakistani culture has been changing for years now with new technologies andtrends. People who are not brand loyal move with the changing times. Somecompetitor can easily enter into the market and make better offers to itsconsumers by focusing on their needs and the satisfaction that they want. Toremain competitive, McDonalds needs to be innovative and should change alongwith the Pakistani consumer styles.


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Al.Najam Fried Chicken


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AAtt AAFFCCTTmm

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ccoonnssiisstt ooffvveerryy ttaalleenntteedd aanndd eexxppeerriieenncceedd ppeerrssoonnnneell.. TThheessee wwoorrkkeerrss

aanndd tteeaamm mmeemmbbeerrss aarree sskkiillllffuullllyy ttrraaiinneedd ttoo ffoollllooww aallll hhyyggiieenniicc

pprroocceedduurreess.. OOuurr ddiisscciipplliinneedd ssttaaffff iiss ttaauugghhtt ttoo rreessppeecctt iittss ccuussttoommeerrss

aanndd ttoo pprroovviiddee tthhee ffaasstteesstt sseerrvviicceess.. WWee aarree pprroouudd tthhaatt wwee uusseeffrroozzeenn cchhiicckkeenn,, wwhhiicchh iiss hhyyggiieenniicc,, hheeaalltthhyy aanndd ssaaffee..

WWee eennssuurree oouurr ppaattrroonnss tthhee ffrreesshhnneessss ooff ffoooodd aallll tthhee ttiimmee

eevveerryy ttiimmee wwhheenn vviissiitt aann AAFFCCTTmm

..

MMIISSSSIIOONN AANNDD VVIISSIIOONN ..

AAFFCC bbeetttteerr ffoorr ppeeooppllee bbyy eennssuurriinngg hheeaalltthhyy ffooooddss

CORE VALUES .

TEAM WORK:We share responsibility and ownership of our

decisions and action and trust one another in making shared

decisions as a fear thought honest and open

communication.

EXCELLENCE:We provide the highest standards of quality in

everything we offer.


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INTEGRITY:We insist on an organizational environment

consistently based upon the highest ethical standards.

RESPECT:we will show application and high regard for our

associates partners and customers.

AAFFCC BBRRAANNCCHHEESS ..

Lahore Head Office

Faisalabad

Gu rat

Rawal indi

Murree

Abbotabad

Sar odha

Sahiwal

Gu ranwala

Karachi


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HHIIEERRAARRCCHHYY ..

Chairman

Finance

Manager

Marketing

Manager

H.R

Manager

Branch

Manager

Trade

Mark

Trade

Mark

Assistant

Branch

Low Level

Employees


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SSEERRVVIICCEESS ..

DDiinnee iinn..

TTaakkee aawwaayy..FFrreeee hhoommee ddeelliivveerryy..

FFrreeee RReegguullaarr DDrriinnkkss..

Dine In:Dine in is the service provided by AFC. The customer

who wants to enjoy their offered products in AFC they use

to sit and enjoy the meal and exchange their ideas in AFC.

This service gives opportunity to the customer to observe

the environment and diversify their selves according to the

environment. Like other fast foods AFC provide self

service. Sitting arrangement is about 65 people. About 15

tables are available.

Take away:

This service is also offered by AFC to those customerswho have less time. These customers utilize the service by

taking the meal with them like parties and trips etc. very busy persons who dont have time to spent on AFC they

take meal with them so they use their time properly on their

work.


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Free Home Delivery:Free home delivery service is also provided by AFC.

They received orders of customers on telephone and deliver

the meal to the customer free of delivery cost. This serviceis to facilitate those customers who are not able to visit

AFC personally due to many reasons. This facility is

particularly to facilitate children and females. So this

service gives opportunity to fulfill their hearted desires for

AFC meal which always remain alive in their memories.

Free Regular Drinks:If cashier fails to give you receipt you are entitled to a

free regular drink.

CCHHAARRIITTYY PPRROOGGRRAAMMSS ..

We have started a "Madrissa, Mosque and a Hospital"

at "Multan Road Phool Nagar" where there is no properarrangement of medicine, hospital and clinics people have

to go to other cities for treatments and many of them

expires in the way so we started the Free Hospital to help

those people.


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HHoossppiittaall::Round the clock active care

Patients are frequently and timely visited throughout

the day by the medical staff, and through the night too if

needed.

Hospital managementThe staff works by a system which

has been by professionals to prevent error and provide the

best of care and satisfaction possible. We try harder every

day, and every small incident of mismanagement is taken

seriously. The smallest of complaints are also taken care ofwith top priority. Our aim is that each patient should be

catered to like a family member and not taken as a routine

client.

Night Duty The night staff is not allowed to sleep and is

compensated for the full 12 hours of the duty.

The medical staff is highly paid to provide them anincentive to stay at Hospital. They are also given

bonuses based on their individual performances every

month.


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SSWWOOTT AANNAALLYYSSIISS ..

AFC has the privilege of being the only fast food hotel

boasting of national quality standards until recently, till thearrival of new fast foods in Pakistan. It has been exploiting

its strengths and opportunities quite efficiently and has

always tried to turn the weaknesses and opportunities in its

favor. An analysis of its strengths, weaknesses,

opportunities and threats as perceived by us is as follows:

SSttrreennggtthhss::oConvenient location.oHospitable treatment to customersoHigh quality food.oLow price food as compared to other fast

foods.

WWeeaakknneesssseess::oLower motivationoLack of training.oLack of performance oriented promotions.o National level /Limited customers


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OOppppoorrttuunniittiieess::oMore incentives for outstanding staff to

retain them as it is difficult to find welltrained staff.

o Specialty restaurant should be introduced to

give a wider variety of services.

TThhrreeaattss::oNew restaurants in Islamabad providing

comfort to the people with a traditional

outlook.

oFast foods like McDonalds and KFC thereis lot of competition prevailing in market

regarding this business.


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Statistical Analysis .

We have distributed 150 questionnaires to the public among them

50 were being distributed in our institute while remaining 100 were

distributed in residential areas of Rawalpindi and Islamabad. The

result is a below along with graphs.

1. McDonald has more taste than AFC.Stronglyagree

agree Neutral Disagree StronglyDisagree

97% 2% 1% 0 0

1% 2%0%

0%

97%

Strongly agree

agree

neutral

Disagree

Strongly Disagree

`


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2. McDonald has good quality food than AFCStrongly

agree

agree Neutral Disagree Strongly

Disagree98% 2% 0 0 0

0% 2%0%

0%

98%

Strongly agree

agree

neutral

Disagree

Strongly Disagree

`


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3. McDonald has more meals than AFC according to customer

needs.

Strongly

agree

agree neutral Disagree StronglyDisagree

99% 0 1% 0 0

1%

0%0%

0%

99%

Strongly agree

agree

neutral

Disagree

Strongly Disagree

`


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4. McDonald company has attractive brand name than AFC

Strongly

agree


96% 0 4% 0 0

4%0%0%

0%

96%

Strongly agree

agree

neutral

Disagree

Strongly Disagree

`


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5. McDonald company charges reasonable prices than AFC.Strongly

agree


0 10% 0 80% 10%

10%0%

10%

80%

0%

Strongly agree

agree

neutral

Disagree

Strongly Disagree

`


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6.McDonald company does not change the quality of product with

change in price as compared to AFC.Strongly

agree


92% 0 0 8% 0

0%

0%

0%

8%

92%

Strongly agree

agree

neutral

Disagree

Strongly Disagree

`


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7. McDonald company provides more incentives and sponsorship

for customer than AFCStrongly

agree


0 30% 5% 65% 0

30%

5%

0%

65%0%

Strongly agree

agreeneutral

Disagree

Strongly Disagree

`


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8. McDonald company has more sale discounts/sales offers as

compared to AFC.

Strongly

agree


0 1% 8% 91% 0%

8%

1% 0%

91%

0%Strongly agree

agree

neutral

Disagree

Strongly Disagree

`


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9.McDonald company has more creative advertisement than AFC.

Stronglyagree


94% 6% 0 0 0

0% 6%0%

0%

94%

Strongly agree

agree

neutralDisagree

Strongly Disagree

`


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10.McDonald company advertises more on media than AFC.Strongly

agree


0 0 80% 20% 0

80%

0%

0%

20%

0%

Strongly agree

agree

neutral

Disagree

Strongly Disagree

`


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11. McDonald have more attractive packaging than AFC.

Stronglyagree


90% 10% 0 0 0

0%

10%

0%0%

90%

Strongly agree

agree

neutral

Disagree

Strongly Disagree

`


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12. McDonald company have more market share as compared toAFC.Strongly

agree

agree neutral Disagree Strongly

Disagree70% 0 30% 0 0

30%

0%0%0%

70%

Strongly agree

agree

neutral

Disagree

Strongly Disagree

`


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13. McDonald are easily available in market as compared to AFC. Strongly

agree


Disagree33% 67% 0 0 0

0%

67%

0%

0%33%

Strongly agree

agree

neutralDisagree

Strongly Disagree

`


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14. McDonald distributors work well as compared to AFC.

Strongly

agree


Disagree95% 5% 0 0 0

0%

5%

0%

0%

95%

Strongly agree

agree

neutral

Disagree

Strongly Disagree

`


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15. Do you think AFC will be completely out of market in future?

Strongly

agree


Disagree0 52% 8% 40% 0

0%

40%

0%

52%

8%

Strongly agree

agree

neutral

Disagree

Strongly Disagree

`


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Analysis and Recommendations .

From the above survey conducted on two fast foodrestaurants one of them was local and the other was

international, we have reached towards a conclusion that:

People mostly prefer international restaurants as it has

good quality food, friendly environment and

reasonable charges. From the above survey we doidentify that local fast food restaurant is far behind

than international, reason behind that it has low

quality food and short menu. Although it offers

relatively low prices and some discount offers but still

it hasnt captured that market share as compare to

McDonald in Pakistan.

McDonalds has variety of meals as compared to Afc.

It provides large range of burgers, fries, international

meals salads and ice cream. On the other hand Afc has

limited variety of burgers and fries .According to our

survey, public want large variety of meals in every

restaurant therefore they prefer McDonald over Afc.

Customers usually prefer brand names when choosing

any restaurant therefore McDonalds is also enjoying

its high market share due to brand name in Pakistan.


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It is a very common practice that quality of product

diminish with a decrease in the price but according toour survey 92% of the public confided that McDonald

has never compromised on their quality even though

when it has decreased its prices.

Our result shows that people are more satisfied with

the discounts and promotions offered by afc.

Another tool for capturing the market is attractive

advertisements and McDonalds is also given

preference by customers due to its advertisements as

compare to Afc.

McDonalds is easily available all over Pakistan. It has

opened numerous branches as compare to Afc. Afc

has limited no. of branches in Pakistan therefore easy

and quick access is also a major factor of preference of

McDonalds over Afc.

Afc is successfully fulfilling customer demand but it

cannot compete McDonalds therefore heavy

investment is still needed by Afc to stay in market

otherwise it might be out of market in near future.


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References

www.google.com

www.afc.com.pk

www.mcdonalds.com
http://www.google.com/http://www.google.com/http://www.afc.com.pk/http://www.afc.com.pk/http://www.mcdonalds.com/http://www.mcdonalds.com/http://www.mcdonalds.com/http://www.afc.com.pk/http://www.google.com/

comparison of afc & mcdonald

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