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COMPANY DESCRIPTION

Established in California during the 1940s by two brothers,


the McDonald’s restaurant became a popular teen hangout
in the first flush of post-war affluence. To feed these youthful
bodies, the brothers reduced the menu to the perennial favourite – hamburgers, applied
assembly line techniques to food production and expanded to four restaurants by 1953.
Taking note of the brothers’ success, in 1955, Entrepreneur Ray Kroc bought the right to
franchise the McDonald’s System. Renamed the McDonald’s Corporation in 1960, Kroc
focused his marketing effort on the family meal and children, spending heavily on
television advertising which promoted the smiling clown face of its child-friendly brand
mascot, Ronald McDonald. Today, the McDonald’s franchise exceeds 30,000
restaurants globally and serves over 50 million people in more than 121 countries each
day.

GOALS AND OBJECTIVES


1. McDonald’s vision is to be the world’s best quick service restaurants experience.
2. McDonalds is committed to maintaining and developing the best food products in the
quick service restaurant market.
3. In order to deliver this, the company has made a number of commitments to food
safety and nutrition.
4. Lead the Quick Service Restaurant market by a program of site development and
profitable restaurant openings, and by attracting new customers. Increasing sales
through promotions will
enable them to continue their program of expansion.

5. McDonalds have an objective to continual enhance and improve their menu. This will
better satisfy their customers and give customers more reason to visit. Many ideas for
new items on the menu come from the franchisees responding to customer demand.
Consumer tastes change over time and McDonalds has to respond to these changes.

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

CORE COMPETENCY AND


SUSTAINABLE COMPETITIVE
ADVANTAGE
McDonald’s core competency is providing convenience when people need and want to
eat fast food at prices that are competitive and provide best value for the customer’s
money. One of McDonald’s competitive advantages is its focus on consistency of
quality, production of food and use of raw materials all around the world. The world
recognition associated with the brand McDonald’s itself is also one of McDonald’s
competitive advantages.
Demand Trends:
There are many variations observed in the demand trends for McDonald’s in
Pakistan. The trend followed by the high income group is relatively stable and
they comprise a very small percentage. The changes in the economy have very
little effect on the demand trends of McDonald’s that is being followed by this
high income group.
Other reasons for these variations are:
McDonald’s is a brand that is mostly perceived by an average Pakistani
customer to be a place which is visited on some occasion or once in a while.
The main reason for this is the low disposable income that people have because
of the inflation and some other unemployment reasons.
On the other hand McDonald’s lovers such as college students, working
individuals, kids and families fond of spending a lot on fast food restaurants
make it a place to be visited very frequently. One of the reasons is high
disposable income by blue collar individuals. Another reason is the attraction for
McDonald’s by kids as well as those who love it for every reason.
There are also global issues which affect food demand for McDonald’s e.g. bird
flu and cow diseases in western countries brought down demand for McDonald’s
some years ago as it was a known fact that they get their meat from
international suppliers in order to maintain quality.
The demand also fell because of the security issues that affected demand for
McDonalds, e.g. suicide attacks on western establishments a year ago.
One of the reasons for the decrease in the demand trend for McDonald’s is the
hostile attitude of the general public in Pakistan towards all the Western
restaurants and multinational companies. Therefore the demand trends for
McDonald’s have declined because of the some of the ill activities that have
been observed during past some years regarding McDonald’s.
Like many other nations people in Pakistan are becoming quite health
conscious. Fast food restaurants are giving rise to problems related to heart and
others such as obesity and excessive cholesterol that are making people very
conscious. Therefore it has been observed that to avoid such problems people
have changed their eating patterns and are spending less on restaurants such
as McDonald’s.
Key Success Factors:
McDonald's Pakistan has an aggressive plan to expand in all other cities of Pakistan
and is rapidly growing with the focus to provide friendly and a quick service restaurant
experience to its customers.
There are many key success factors due to which McDonalds is successful in the
market. We have been successful in identifying a few:
All the franchises of McDonalds in Pakistan are owned by Lakson Group of
Companies. Apart from the fact that LGC is one of Pakistan’s biggest
corporations, their management allows not only standardization of quality but a
more uniform and effective marketing strategies in order to sustain in the market.
Therefore McDonald’s being its part had to continue to strive to maintain its
standards in the local region.
Many McDonald's restaurants have included a playground for children and
advertising geared toward children, and some have been redesigned in a more
'natural' style, with a particular emphasis on comfort: introducing lounge areas
and fireplaces, and eliminating hard plastic chairs and tables. This has given a
new outlook to the McDonald’s as a quick service restaurant that is still not be
seen on other fast food restaurants.
McDonalds doesn’t offer just burgers. Their well diversified menu is also one of
the key success factors as most of McDonald’s competitors are quite specialized:
KFC in chicken, Pizza Hut in pizzas etc.
When it comes to eating out during Ramadan in any fast food restaurant, the
name that clicks to the customers is McDonald’s. The reason is the affordable
deals that they offer, that seem to beat all others when it comes to prices.
Another advantage that McDonald’s has on its competitors is the location of its
franchises. Its main advantage is that it is located in vicinity that is easily
approachable. Secondly it has got in its surroundings other very attractive places
to be visited by people who want to enjoy their life to the full. These places are a
source of attraction not for the services they provide but for McDonald’s as well.
For example one of its outlets has been opened in Park Towers in Karachi so as
to attract the shoppers who visit it very frequently. Another strategic location that
McDonald’s has acquired is at the Clifton beach. This has forced many others
nearby restaurants and one of the very famous cuisine restaurants with the
name of Kublai Khan to get closed. Same is the case in Rawalpindi/Islamabad
where McDonald’s holds an important strategic location. The customers that are
driven to the Cinepax are automatically attracted towards McDonald’s.

Product life Cycle Analysis:


In the Pakistani market McDonald’s has been placed in the growth phase as it is
still growing and has the potential to grow further. There are many strategies that
have been employed in the other countries but are still to be made a part of the
McDonald’s franchises in Pakistan.
Following are some of the strategies that can be made a part of the Pakistani
market so as to increase its market growth:
a) McDonald’s in Pakistan can introduce breakfast in its menu to cater 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 will increase.
b) To gain advantage in the local market, McDonald’s should introduce coffee at
all the franchises.
c) To maintain its brand image as a twenty four seven customer restaurant,
McDonald’s must make its timings more flexible to the needs of those who
are usually very busy with their work schedules.

BCG Matrix:
According to BCG Matrix McDonald’s is a star. The reason for this is its 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 their low growth rate and high market
share. During past some years KFC and Pizza Hut have lost their market growth
because of the fact that they lost their standard war to their competitor i-e McDonald’s.
Another direct competitor of McDonald’s is Subway. According to BCG Matrix it is a dog.
Some of the reasons that are responsible for its low market share and low market
growth are the less expansion strategies being followed by the company. Secondly they
are not focusing at all on all the major cities, rather they are only focused on the target
segments of Lahore and Karachi.
CUSTOMER ANALYSIS
(a) SEGMENTATION:
The customers of McDonald’s have been segmented on the
basis of AIOD into four categories, based on the product
attributes that fulfill needs like ‘fast’ food, ambience, status
symbol and hygiene.

Activities Interests Opinions Demographics


1 “Fast” Student, Sports, Influenced by Age: 16-24
food working; Entertainment peer years old.
Adventurous, , Fashion, pressure, Marital status:
Energetic. Music, Energetic, Single; Heavy
Recreation. Impulse users
buying.
2 Ambience Student, Entertainment Ambitious, Age: 20-35 yrs
working/self- , Recreation, Future old. Marital
made Fashion, business and status: Single
businessmen; Music, social issues,and Married.
working on Socialization. Politics. Light to
projects. medium users.
3 Status Student, Sports, Energetic, Age: 16-25 yrs
Symbol working; Entertainment Impulse old. Marital
Hanging out, , Fashion, buying, status: Single;
Adventurous. Music, influenced by light to medium
Recreation. peer users
pressure
4 Hygiene Working Home, Planned Age: 25-45 yrs
women/men, Recreation, purchasing, old; Marital
house-wives; shopping, Authoritarian status: Newly
Shopping, Fashion, , Strong married, Full
Club views, Nest; Light
memberships. Politics, users
Future
busines
s and
social
issues.

“FAST” FOOD:
This segment of customers enjoys the Quick Service Restaurant (QSR) facet of
McDonald’s and has its needs fulfilled. Since McDonald’s competes rigorously in the
market on the quick delivery attribute, the customers expect their food to be
delivered to them fast, both at the outlet, and at home (home delivery). A large
majority of this segment is composed of students whose activities are adventurous,
enthusiastic, energetic, and recreational and revolve around sports, clubs, hang-
outs and shopping etc. This segment thus targets the market that indulges in
impulse buying and is influenced by peer-pressure. These customers are heavy user
of the product at hand. A minority of newly working people are also included in this
segment.

AMBIENCE:
This segment enjoys the unique ambience provided by McDonald’s in Pakistan.
Since the regular consumers of this product belong to the upper-middle class, they
prefer having a meal with the level of customer service and a tinge of sophistication
that the outlets provide. The customers of this segment are students as well as
working class. These people enjoy recreation and socialization activities. They have
strong views about the current affairs and the future business and social issues.

STATUS SYMBOL:
The people of this segment perceive the use of this product as a status symbol and
basically comprise students and new-working class. These customers like being
seen at the right places and like to associate and socialize with people of the same
class. These customers are enthusiastic about entertainment, fashion, music and
sports. They have fickle opinions and subject to change because of peer pressure.
They follow fads and indulge in impulse buying.

HYGIENE:
This segment comprises people who are concerned with
hygiene and how the food is prepared and served and also the cleanliness of the
environment where they eat. It comprises of middle-aged people mostly house-
wives and working women/men. These are light users and make purchases once in
a while, probably as a substitute rather than a first-choice. These people are
authoritarian, have strong views about politics, business and current affairs. They
make planned purchases and weigh their options before they make a buying
decision.
a) POSITIONING:
We have used perceptual maps to analyze the positioning of various QSRs in
Pakistan. The attributes for perceptual mapping include customer satisfaction,
pricing, popularity; market Share, sophistication and availability.
SWOT ANALYSIS
 Strengths:
McDonalds has been able to maintain its market share in the
QSR market of Pakistan since 1998 and this is actually the major strength of
McDonalds that has made it so popular. Other major strengths are listed below:

Products:
The reputation of the various products each season has made it possible for the
company to attract customers having different tastes and to try out the season
specialties. 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 a
beef burger along with a drink.

McDonald’s offers many flavors of Mcflurry ice cream from a mix of M&Ms to Oreo
cookies. The M&Ms flavor was introduced about a year back and is still popular among
the M&Ms lovers. McDonald’s has also customized its meal according to the tastes of
Pakistan. People in Pakistan do not eat bacon so McDonalds does not offer such sort of
meals in the country.

Social Responsibility:
The social responsibility acts of McDonald’s are commendable. It has been able to
maintain a reputation as a socially responsible and aware enterprise all over the world.
Its practice of going green and serving in an environment friendly way has made it
possible for McDonald’s to gain fame.
On 27th March’ 2008, McDonald's announced that it is giving further backing to
Rainforest Alliance certification by offering a cup of tea with a conscience in all of its
1,200 restaurants in the UK.
In Pakistan however, McDonald’s has not yet come up with
an effort that can show the company’s goodwill towards the
masses here. Like KFC, McDonald’s should also involve
itself in educational and social activities so that people should know that McDonald’s
isn’t yet another business oriented corporation aimed at just making money but it
actually cares.

Employment Opportunities:
The equal employment opportunities regardless of race, color, sex, national region, age,
disability etc are offered to people. People looking for jobs can also upload their CVs
online.

Brand Recognition:
McDonalds has gained recognition worldwide. The chain is present all over the world in
more than 122 countries. In Pakistan a large number of franchises are present, majority
of them in Karachi and Lahore and McDonald’s is regarded as a symbol of value and
quality for your money.

Good communication and friendly


environment:
McDonalds has always ensured a friendly environment to offer to its customers.
Children love going there, having a happy meal and the toys that they get as a gift. Play
places also serve as a significant attraction where children can go and make friends
and play. Employees are also very polite and they are always ready to serve you in
every best possible way that they can.
Party celebrations:
McDonald’s offers its clients, especially children to celebrate
their birthdays there. One can invite friends, they decorate
the party area, various party games are organized along with
face painting activity etc. Children are provided with an
opportunity to celebrate their day in the way that they want.

Partnership with Coca Cola:


McDonalds and Coca Cola are official global partners. Coca cola is a big brand name
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 the users 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 also been
opened in various cities. The tastes are a bit different but they too are offering chicken
and cheese burgers, drinks and fries at competitive prices. This situation requires
McDonald’s to be more innovative and price competitive.

More advertising:
In Pakistan, McDonald’s rarely advertises at TV, however billboards often show off juicy
McDonald’s burgers but this could affect its popularity in future. It definitely needs to
advertise more to reach the target and the potential customers.
Drive-ins:
The service at McDonald’s drive-ins has been subject to criticism all over the
world and a lot of people complaint that the orders are either missing some of the
items or are entirely wrong. The service time at the drive ins is also subject to
great variations and needs to be improved.

 Opportunities:
Reasonable Prices:
McDonalds can broaden its market by offering meals at more competitive prices in
comparison to other local QSRs such as AFC, Al Maida etc. This way it could get hold
of the potential customers too.

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

Breakfast and special noon meals:


Now in Pakistan most the trend of women going to work and opting for profession is
increasing as a result of which they are running short of time to carry out all the home
chores along with their work. McDonalds can offer deals to such market by catering
them in the morning for breakfast.
During the office hours people mostly go out for their lunch to restaurants. McDonalds
can avail this potential market too.

Growing dinning out Market:


In Pakistan the dining out trend is increasing especially in youngsters and upper middle
class. McDonalds has the opportunity to grasp this market quite well. It is already doing
well by serving them but it could arrange various activities for the people of this age.

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

McCafe’s:
McDonalds has opened coffee shops by the name of McCafe’s in UK. Pakistan can
serve as a new potential market for these cafes.

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 the present customers, this
could be posed as a threat to McDonalds. Subway is offering its low fat veggie and
chicken sandwiches at prices almost the same as McDonalds. For McDonalds diet
meals could be a way out of this situation. Until now, McDonald’s 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 are entering not
only from other countries but from within the country too. Their competitive prices could
be a reason due to which McDonalds can lose its share in the Pakistani market.

Changing customer styles:


Pakistani culture has been changing for years now with new technologies and trends.
People who are not brand loyal move with the changing times. Some competitor can
easily enter into the market and make better offers to its consumers by focusing on their
needs and the satisfaction that they want. To remain competitive, McDonalds needs to
be innovative and should change along with the Pakistani consumer styles.

PEST ANALYSIS
Political Environment:
In general terms the government policies do not affect the company much nor do the
changes in the government influence the organization of the company. Mostly what
company obligation to the government is the paying of different taxes which include
payroll taxes and business taxes. McDonald’s enjoys an added advantage in countries
where consumer protection laws are not very strong. In countries like US, where the
consumer protection laws are very strong, there are great costs associated with a
breach in quality or service in the form of litigations and lawsuits.

Economical Environment:
There are many factors which can affect the operation of a company. In Pakistan
McDonalds offer the food at higher rates in comparison to the local food restaurants.
Most of the people in Pakistan fall in the category of middle class and it is not affordable
for them to have McDonalds at regular basis. Due to layoffs and other economic
downturn of the current recession period the profits of McDonalds might have dwindle
as people consider it as a luxury to go and eat out at some foreign QSR.

Social Environment:
When McDonalds entered the Pakistani market people were not very much into fast
food eating style but now the business has been influenced by the changes made in the
society especially changes in the eating habits among young people who helped in the
acceptance of the fast food idea but also the rapid change of way of life which is very
quick now as everyday people are running out of time, QSR is the way out for them.
This in turn has helped the company to grow and to increase its profits. As McDonalds
offer Hilal food majorly so there are no religious, ethical or cultural issues associated
with the operations. A negative aspect of a social factor happening in Pakistan is
sometimes the fact that many times anti Americans feelings rising for different reasons
may a lot or a little affect the company by boycotting Americans goods.
For the rising importance of corporate social responsibility recently McDonald's has
announced that it is giving further backing to Rainforest Alliance certification by offering
a cup of tea with a conscience in all of its 1,200 restaurants in the UK.

Technological Environment:
Pakistan is a developing country and new technology gadgets and techniques are
always welcomed. McDonalds’s introduced new food production techniques in Pakistan
which were later adopted by the local QSRs. Food made with the help of machines is
considered more hygienic. However, the continuous developments in the technology
sector needs McDonalds to be updated regularly but as in Pakistan food making
technology is still in the development stage so McDonalds has an edge over others in
this regard.
It is natural that technology has helped McDonald and especially its employees as they
have to serve quick services. Computers and smart cashiers are used by the
employees so they would not get confused and they are provided with customized
database management system.
COMPETITOR ANALYSIS
PIZZA HUT:
Pizza Hut is a global fast food chain, a subsidiary of Yum! Brands Inc. , the world’s
largest restaurant company. It was founded in Wichita, Kansas, USA in 1958 and is
running its operations in about 91 countries worldwide. It’s one of the major
competitions of McDonald’s in the Pakistani QSR industry. It started its operations in
Pakistan in 1993 with a single outlet at Boat Basin, Clifton, Karachi. Today it operates in
nine cities of Pakistan with 38 outlets. The cities include Karachi, Lahore, Islamabad,
Peshawar, Faisalabad, Multan, Rawalpindi, Sialkot and Hyderabad. Pizza Hut serves a
large variety of starters, soups, salads, sandwiches, Pastas and deserts.

Strategic Objectives:
When we talk about strategic objectives, Pizza hut says: We want to satisfy our
customers by offering them “The best”. Diversification of the products that they offer has
always been a focal point of strategies at Pizza Hut. The strategies at Pizza hut are
guided by principles like Cleanliness, Hospitality, Accuracy, Maintenance, Product
quality and Speed (CHAMPS). Since it’s a global chain, the strategies are based upon
customizing the services, advertising and marketing activities according to the countries
that they are operating in. Customer service and satisfaction have of course always
been a vital aspect of the strategies. Another important feature of the Pizza Hut’s
strategies are the 3 Fs (Fun, Friendly and Familiar).
Problems and Weaknesses:
At one time, the biggest marketing problem Pizza Hut faced
was lunch. As compared to McDonald’s, its restaurants had
virtually no lunch time sales, and neither did any of it’s pizza
competitors. The reason, of course, is that it takes 20
minutes to cook a pizza from scratch in a traditional pizza
oven, and most people won’t spend that long at lunch time waiting to be served. By
using a new, continuous-broiling technology adapted from burger business, Pizza Hut
developed a personal pan pizza that could be served in less than 5 minutes. It was
quick, tasty and moderately priced. And Pizza hut rolled it out to all 4500 stores
worldwide and locked up the pizza-lunch business almost everywhere, almost

overnight.

One of the weaknesses of Pizza hut that it hasn’t overcome yet is it’s price. Local
chains are constantly springing up, offering lower prices and similar recipes. Most
people don’t mind giving a lower price for slightly different taste because of which the
sales at pizza hut at are suffering.
Growing awareness about eco-friendliness has forced a lot of the food chains to
maintain practices that conform to international environmental standards. For example
McDonald’s is introducing coffee beans grown in environmental friendly conditions in
order to appeal to the people who are conscious about environmental friendliness. In
the Pizza selling restaurants, organic pizzas are the new concepts that are appealing to
the masses to these days. It’s a phenomenon that highlights the health conscious
attitude as well as environmental friendliness. Pizza Hut on the other hand has not
come up with any strategy in this area and if it doesn’t even in the future, it is going to
lag behind the chains that offer healthier food.

Competitive Advantages:
Pizza Hut has the first mover advantage in the pizza chains because of which it has
developed a strong customer base which is one of its strengths.
In the Pakistani QSRs industry, the delivery service of Pizza hut is clearly a competitive
advantage that it enjoys. Pizza hut’s delivery service is one of quickest and the pizzas
delivered are oven hot in the real sense of the world.
Pizza Hut is often referred to as ‘Pizza Innovation Leader’ because it is constantly
coming up with new varieties of pizzas to appeal the different audiences and at the
same time, people at the pizza hut have a really good idea about which varieties are
appealing to the customers and they are thus retained in the menus

The first mover advantage is an advantage that Pizza hut was born with but time, Pizza
hut has been successfully creating competitive advantages like a traditionally strong

brand name for itself and the quality service that it provides.

KENTUCKY FRIED CHICKEN (KFC):


KFC, founded and also known as Kentucky Fried Chicken, is a chain of fast food
restaurants based in Louisville, Kentucky. KFC is a brand and operating segment,
called a "concept", of Yum! Brands since 1997, when that company was spun off from
PepsiCo as Tricon Global Restaurants Inc.. KFC has more than 11,000 restaurants in
more than 80 countries. KFC came to Pakistan in 1996 with the first branch opening in
Karachi and later in Lahore. The Franchisee was a Pakistani owned and operated,
Dubai-based Company the Cupola Group, which owns licenses and its own restaurant
throughout Pakistan and the middle-east.

Strategic Objectives:
KFC has the strategic objectives of expansion along with profits and sales growth. KFC
has also been applying its strategies at improving services and making them more and
more customer friendly. It has not only been customizing it's menu according to the
countries that it has been operating in, it has also been trying to cater to different ethnic
groups like African Americans and Hispanics. Such types of strategies are focused on
increasing the customer base by better customization of products. Other than the
traditional eat-in restaurants, KFC has also been expanding into non-traditional facilities
like shopping malls, hospitals, universities, stadiums; office buildings etc and a number
of strategies have been formulated to aid this kind of expansion.

Problems and Weaknesses:


• The advertising campaign of KFC does not specifically appeal to any segment. It
does not appear to have a consistent long-term approach. The U.S. has
enormous changes in its demographics. Only in US, single-person households
increased from 12% in 1970 to 25% in 1995. With this kind of dramatic change,
KFC does not have a proper approach to its target market.

• The increased health concerns of the masses has put KFC at a great
disadvantage because of the word 'fried' attached to it's brand name which gives
an instant idea that the food would be oily and unhealthy.

• Another weakness of KFC is that of the lack of a corporate direction because it


has been a part of four different parent companies till now namely, Heublein Inc.,
R.J Reynolds, Pepsi Co. and Yumm! Brands Inc. The corporate functioning of
these companies has been pretty different from each other because of which a
strong culture could not be established at KFC and it had long been struggling
with it.

• Because of the nature of the chicken segment of the fast food industry,
innovation was never a primary strategy for KFC. However, during the late
1980's, other fast food chains, such as McDonald's, began to offer chicken as a
menu option. During this time, McDonald's had already introduced the
McChicken while KFC was still testing its own chicken sandwich. This delay
significantly increased the cost of developing consumer awareness for the KFC
sandwich.

Competitive Advantage:

• A very strong financial background is one of KFC’s competitive advantages.

• KFC has been functioning as a multinational corporation for several decades. As


a result, the company is familiar with the logistical and quality problems which
accompany operating an international food operation, and has demonstrated that
it can work with host countries and businesses within the host country to develop

a strategy which works in the most cost effective way.

• With the passage of time, KFC has developed another very important
competitive advantage for itself- Environmental Friendliness. In March 2009, the
first eco-friendly green KFC was opened in Northampton USA. The restaurant is
designed according to environmental goals that include cutting energy and water
consumption by 30 percent and reducing CO2 emissions. Operations at the new
site are also expected to reduce waste and the amount of rubbish sent to
landfills; the restaurant composts and recycles other waste, grease and used
cooking oil. Other than this, in an effort to reduce its packaging by 1,400 tons,
KFC is now switching from cardboard to recyclable and biodegradable paper
wrapping for some of its products.

Subway:
Subway is a restaurant franchise that primarily sells submarine sandwiches and salads.
It is owned and operated by Doctor's Associates, Inc. (DAI). Subway is one of the
fastest growing franchises in the world with approximately 30,052 restaurants in 90
countries as of April 2009. It is the second largest restaurant operator globally after
Yum! Brands (35,000 locations)
Subway restaurants are known for their sub sandwiches and salads. The Subway
restaurant chain is the fastest growing restaurant chain in the world surpassing even
McDonald's. Subway has the second most stores of any chain restaurant system in the
world after McDonald's, and the most locations in North America of any chain. Subway
was founded in 1965, however the franchising started in 1974.
In Pakistan, subway has restaurants at 30 locations, including Karachi, Lahore,
Gujranwala, Islamabad, Sialkot and Multan. Majority of the restaurants are located in
Lahore and Karachi.

Strategic Objectives:
The strategic objectives of Subway focus on creating a global strategic plan to enable
Subway Restaurants to succeed internationally. Other than this subway is intent upon
introducing the concept of ‘healthy fast food’. Sandwiches of Subway have been
included in diet plans by experts. Jared Fogle, an obese college student who weighed
425 pounds introduced a weight loss plan called the subway diet and lost 245 pounds in
11 months. Subway’s stand regarding obesity in children is not new to its customers.
Strategies at Subway are not only about a really ambitious increase in franchises all
over the world but they are also about making the food more and more appealing to the
health conscious customers because health conscious attitudes, according to the
experts, are here to stay now.

Problems and Weaknesses:


• One of the major problems that can be identified with Subway right now is
related to the franchises. Although Subway has long been named as the number
one franchise opportunity by The Entrepreneur magazine but it seems that
Subway has developed a myopic focus regarding the franchises. Subway has
regional managers who have the opening of new franchises as their sole aim
and their bonuses and incentives are tied to the opening of new franchises.
These managers at Subway even don't care if the new franchises are detrimental
for the existing ones and because of this; many of the franchises are becoming a
victim of internal competition or cannibalization. For example, in Lahore alone,
Subway has 20 outlets. Instead of this, Subway could have targeted Cities like
Faisalabad and explored a new market. Franchise owners believe that Subway
has been irresponsible with allocating the franchises and uses bloated store
sales projections as part of their sales pitch for encouraging new franchises.

• The opening up of a lot of new stores in close proximities are also resulting in
decline in sales per store because of which the franchisees are not very satisfies
with Subway.

• The environment at the Subway stores cannot be compared with that of


McDonald's, KFC or Pizza Hut. The Stores are small and suffocating and do not
even provide the necessary privacy to the people eating there. Subway has no
standard size for any of its store because of which the sales oriented
Franchisees try to fix them at as smaller a place as possible. This is tarnishing
the image of Subway as an international brand.

• The quality of the sandwiches and standards of cleanliness at Subway are going
down day by day due to the greater and greater autonomy that franchisees
enjoy. The Subway at Rawalpindi was recently closed down due to quality issues
as well.

• There is a dire need of a system to integrate the large number of Subway


franchises and to ensure that the original Subway practices are being followed
there. The management of the franchises is one part of their operations that
Subway has not handled well.

Competitive Advantage:
One of the greatest competitive advantage that Subway was born with is it's healthy
Menu. The salads and sandwiches appeal much more to the people as compared to
fried chicken, burgers, fries and pizzas. With its advertising and promotion, Subway has
long been highlighting its healthy food in advertising and promotions and with the
passage of time, it has established itself as a healthy brand.

• Another competitive advantage that subway enjoys is the fact that along with
traditional locations, Subway restaurants can be found in more than 4,000 non-
traditional locations such as food courts, health clubs, hospitals, universities,
amusement parks or just about anywhere. In fact, Subway restaurants can even
be found in automobile showrooms and Laundromats! This global presence is
indeed a sustainable advantage for Subway and needs to be managed properly.

• Subway's fresh food is also a competitive advantage because unlike it's


competitors like McDonald's it allows it's franchisees to choose their own food

suppliers, to ensure they can access the freshest ingredients.


SCENARIO ANALYSIS
Scenario Analysis is traditionally considered to be a tool that provides a means for
considering multiple futures in relation to social, economical, political and technological
changes. There are different types of scenarios that are used for specific situations and
circumstances. For McDonald’s we have developed a number of scenarios keeping in
mind the present socio-economic and political situation.
These scenarios are aimed at identifying assumptions at a macro level. Amongst the
STEEP (social, technological, economic, environmental and political) forces McDonald’s
focuses mainly on the political, environmental and the social factors.

Economic Slowdown:
Like any other multinational companies, McDonald’s is exposed to any changes in the
global economy e.g. inflation over past some years. The fluctuation of the foreign
currency and its international expansion has left it as very sensitive to economic
slowdown of other countries. The economic slowdown in some countries, particularly in
most of developing countries has made the customers become price sensitive, and it
has a great impact over the buying behavior of the customers because of reduction in
the purchasing power of customers. In order to cope up with the upcoming recession
McDonald’s needs to focus on two major strategies:
More for less (in terms of price)
McDonald’s in developing countries like Pakistan should now focus on revenue
growth by attracting more customers to the existing franchises rather than going
for growth in terms of opening more and more franchises.
In order to cut costs it can form associations with food companies and suppliers just like
it has done with Coca-Cola. Other than this McDonald’s should start diversifying in low
priced products like milkshakes and smoothies and introduce more variety in the
existing range. For most people out there, McDonald’s is more of an experience rather
than just an eating out occasion and McDonald’s has to focus on making the experience
more and more fulfilling in terms of both value and price. It can also introduce a greater
range of low priced snacks to cater to the recession driven public for whom McDonald’s

is more of a status symbol.

Health Conscious attitude of People:


There are many social issues that can be thought of as potential threat to the company
in present as well as in future. One of the concerning causes is the issue related to
health conscious attitude of people. The fast food industry is often criticized because of
its role in creating numerous health problems including obesity. Initially these fast food
chains were thought to be the driving force for the unhealthy eating disorders.
Nowadays, more and more customers are becoming aware of nutritional values and
health benefits of products and services than before. Childhood obesity is also a major
cause of cynicism regarding the fast food chains. The said situation has a great impact
over the brand, due to the fact that children have the big share on the revenue of the
brand. The said trends reduced the revenues, staff motivation as well as the interests of
the shareholders of the company, and it can be showed in the strong protest by different
nutritional campaigners against the food being promoted by the company that have
affected many lives, not only in the US but in other part of the world. These are still the
potential source of threats for the company as the said events caused so much
negative impact on the image of the brand that it pushed Disney to decide not to renew
its contract with the McDonald’s.
In order to cope with this situation McDonald’s will have to
come up with greater variations in its menu for the health conscious people. McDonald’s
will have to put greater emphasis on healthier food like sandwiches, baked potatoes
and salads. The outlets in Pakistan serve a little more than the traditional McDonald’s
burgers. They’ll have to introduce a healthier menu and then emphasize the healthy
side of McDonald’s through aggressive promotion to cope with the health concerns
associated with its products. McDonald’s should also come up with low calorie
variations of all its burgers and make its fries healthier by using the right kind of oil.
Increased Competition:
One of the environmental factors surrounding McDonald’s is the fierce competition from
the competitors. There are many players in the industry, and most of them are offering
the same or similar products and services. The reason behind this growth is due to the
improvement of the entire fast food industry in the world. There is an intensive price
war, extreme battle of innovations and breakthrough and serious promotions and
advertisements are being implemented by different players in the global fast food
industry. Increasing competition has led to aggressive pricing policies amongst the large
brands as well as pushed them to increase their menu diversification as well as product
developments in order to increase sales and market share, thus maintain current
position in the entire market. The start of new McCafe’s at McDonald’s is also one of the
strategies to capture some of Starbuck’s market share.
To keep hooked on with its current customers, McDonald’s need to focus more on the
strategies that attract children to their store. This would not only help them in keeping
their customers but would build on relationship with the new ones.
McDonald’s would also have to put greater focus on cutting costs because in these
times of recession, a lower price is something that attracts a lot of customers. People at
McDonald’s should study their entire value chain and cut costs wherever they can. Due
to recession, a lot of fast food chains are losing their customer and in today’s
competitive environment, the loss of one is the gain of other. By applying this strategy
McDonald’s should see what is that factor because of which the customers are
abandoning these brands and then provide these customers such alternatives that
nobody else is providing.

HISTORICAL STRATEGIES AND


ANALYSIS
We will now take a look at the strategies pursued by McDonald’s and it’s two major
competitors- KFC and Pizza Hut all over the world so that we can see where these
companies are headed in terms of strategic goals and objectives.

MCDONALD’S
Hummer of a Summer PR strategy:
In August 2006, McDonald’s in US launched a PR effort by the name of ‘Hummer of a
Summer’. This was a collaborative effort of General Motors and McDonald’s and
focused on HUMMER- One of General Motors’ key divisions.
To announce the program launch, McDonald's staged a three-mile long parade down
Chicago's Michigan Avenue during lunch hour. Ronald McDonald led the parade on the
hood of a HUMMER and was followed by the life-size versions of the trucks that will be
available in the Happy Meals. The parade ended at the flagship McDonald's restaurant
in downtown Chicago. Kids at the restaurant were also invited to go inside the vehicles.
The kids were then treated to free happy meals.
There were also regional events and programs sponsored by local McDonald's
restaurants and GM dealers.
McDonald's Happy Meal and Mighty Kids Meal HUMMER
line-up featured eight dynamic vehicles, capturing the power,
excitement and unique styling that make HUMMER one of

the most recognizable vehicles on (and off) the road.

One of eight toy HUMMERS were packed in each "boy" Happy Meal ("girl" meals
featured Polly Pocket). The full HUMMER lineup was represented, from the now-
defunct H1 to the H3T Concept pickup.
This strategy proved to be quite popular with the kids and the way people at
McDonald’s tried to cash the awe and charisma associated with the brand HUMMER
was remarkable. The strategy proved to be a win-win one for both GM and McDonald’s
because it not only attracted the kids to the happy meal even more than before but also
magnified the iconic brand status that HUMMER has acquired over the years.

McMommy Blogging Society:


In December’ 2007, McDonald's opened up its
kitchens to an army of mother bloggers, who will
be reporting their allegedly unedited findings on McDonald's website, and their verifiably
unedited findings on blogs around the Internet. The fast food giant's goal was to stem
criticism that the restaurant's offerings
are making the country obese by making
their processes more transparent to the
public.
The burger giant apparently also was
hoping that the program will help
contradict stories of fattening, unhealthy
food that have been detailed in books such as "Fast Food Nation" and movies such as
"Super Size Me."
McDonald's equipped six mothers with laptop computers to record their impressions of
its operations over the next few months. The moms were chosen by an independent
company from a group of 4,000 applicants, and the blogs and journals were posted
"unedited" beginning June 20’ 2007 on McDonald's home page, where it hoped to
attract other moms interested in seeing the comments, officials said last week.
Selected moms were expected to participate in as many as three "field trips" lasting two
to three days, and received payment for "reasonable travel expenses."
Nothing like this has ever been done on the internet by a fast food company before and
McDonald’s intended to exceed the customer expectations by coming up with a new
strategy that would astonish everybody and the campaign was indeed well received by
the audience.

Tier Pricing Strategy:


For McDonald’s, tier-pricing is becoming part of its global strategy. To stay competitive
in an era of food inflation, the US franchise is abandoning its ‘one price fits all’
approach.
McDonald's has implemented a tier-pricing system in Taiwan, partitioning the island into
three districts to counter the impact of food price inflation.

The three districts are the rural south and east; the industrial north and west (plus three
southern cities); and entertainment and high-rent districts across the island. Future
prices will be adjusted according to income levels, the consumer price index and other
factors for each district.
In Japan, McDonald’s was also the first marketer to introduce tier-pricing, according to
Tsao. “Japan was a good choice of model for us to follow,” he said.
“The economic situation in Japan is similar to Taiwan. Both countries have crowded
restaurant sectors and face intense competition. Operating costs in Taiwan vary widely
due to rent, labour and transportation.”
In Taiwan McDonald’s is using the consulting firm, Revenue Management Solutions to
analyze operating costs, customer demand, price sensitivity and Government price
indexes to create a map of the price districts.

For the menu-board price changes, McDonald’s is scattering price rises on different
items rather than instituting blanket increases. Tsao said the reaction from Taiwan’s
consumers had been mixed.

Strategy for increasing sales at existing


restaurants:
McDonald’s has also focused on increasing sales at existing restaurants instead of
opening new ones. To do so, McDonald's has remodeled many restaurants, kept stores
open longer and increased menu options. Nevertheless, new McDonald’s restaurants
are still opening around the world at a rapid rate - the company plans to open about
1,000 units in 2008, and continues to grow its new restaurants at a 1%-2% rate each
year.
McDonald's executives say they're adding features that will increase sales. Mr. Alvarez
showed off a self-service kiosk where customers can place orders electronically. He
recently watched customers use kiosks at a McDonald's in Tours, France.
Mr. Alvarez says a top complaint of French customers about McDonald's is that they
feel pressured to order, which keeps some families from coming in. Ordering at a kiosk,
he says, "allows them to either control their kids or control their order."
Remodeling of locations:
An estimated 7,000 U.S restaurants will be rebuilt, relocated
or refreshed as part of the far reaching plan to upgrade its
public persona with updated restaurant designs intended to

boost the bottom line.

The redesign is risky and has many franchisees up in arms over the high costs of a
makeover. But company officials believe the overhaul is needed. McDonald's, whose
restaurants are visited by more than 40 million people every day, has moved
aggressively over the past three years to revamp its menu and attract a new breed of
customer.
The traditional McDonald's yellow and red colors will remain, but the red will be muted
to terra cotta and olive and sage green will be added to the mix. To warm up their look,
the restaurants will have less plastic and more brick and wood, with modern hanging
lights to produce a softer glow. Contemporary art or framed photographs will hang on
the walls.
The dining area will be separated into three sections with distinct personalities.
The "linger" zone will offer comfortable
armchairs, sofas, and Wi-Fi
conne ctions.
The focus is on young adults who want to

socialize, hang out, and linger.

Sponsoring the report


cards:
For us it seems unthinkable that companies are allowed to extend their persuasive
activities inside the walls of elementary schools, especially if they sell what could be
called vice-products. An article appeared in August 2007 in Ad Age Daily which
reported that McDonalds sponsors school children's report cards in Seminole County,
Fla.
The cover of the report card has the McDonalds logo, and (here it gets nasty) a 'good'
report gets rewarded with a gift coupon for a Happy meal at McDonalds. From the
company's perspective a very smart move: get you message to the captive target
audience (I guess kids and parents HAVE to look at report cards), and apply two major
conditioning procedures at the same time:
- operant conditioning: the coupon is a 'reward' for performance
- Evaluative conditioning: the McDonalds brand is associated with a positive event (at
least if the rapport is good)
This strategy was however not a very good move at McDonald’s part and After nearly
2,000 parent complaints about children health concerns, McDonald's ended its
controversial report card advertising in Seminole County, Florida in January 2008.
McDonald’s Coffee Strategy:
McDonald's – who took some coffee ground away from Starbucks and Dunkin' Donuts
last year – announced that they'll install coffee bars with Starbucks-like baristas in
14,000 U.S. locations this year.
Along with drip coffee, McDonald's will be serving high-end coffee drinks like lattes and
cappuccinos. Following the successful introduction of their premium drip coffee, this
would seem to be a natural, next-step line extension, especially with so many locations
to offer up product throughout the United States.
It has also been reported that the McDonald's process will use a single machine that
automatically steams the milk and combines it with the espresso, which cuts down on
some of the drama and ceremony that comes with the preparation of a really well
prepared espresso. And since selection and variety is also a category loyalty driver,
McDonald's is bound to have a more narrow selection on offer than the gabillion
varieties available at Starbucks.
However, there are two reasons to think that McDonald's might find the high-end coffee
market surprisingly hard to crack.
1. The processes required to serve customized drinks are vastly different from the
processes required to serve McDonald's tightly standardized menu. Running two
distinct systems in a single retail location can be very difficult. Lengthening lines could
alienate core McDonald's customers looking for reliably quick food.
2. McDonald's franchise model means it can't simply force the coffee bars on retail
locations. Individual franchise owners have to decide that investing in the bars is in their
best interest. While McDonald's claims that early market tests have proved quite
promising, a consultant to some of McDonald's franchise owners told USA Today, "It is
certainly the biggest potential mistake in the history of the system."

Global Best of Green:


McDonald’s has also been trying to show consumers its “greener” side with a new
institutional marketing effort, “Global Best of Green.” McDonald’s around the world has
taken a number of initiatives around the world as a part of this marketing effort which
include the following.

• About 80 percent of packaging used by McDonald’s Europe comes from


renewable resources.
• In Canada, switching from bleached white napkins to
plain brown has saved $1.3 million annually, while
reducing energy, wood and water use.
• U.S. restaurant locations recycle about 13,000 pounds of
used cooking oil per year, on average.
• Using a fryer that requires less oil allows restaurants to cook the same product
with 40 percent less oil, saving 4 percent in energy over other fryer models.
• U.S. locations completing an energy survey identify savings of $3,000-6,000.
McDonald’s USA recognizes “Energy All-Stars,” or store managers that have
provided examples for others.
• In France, 10 restaurants that have committed themselves to an interactive
software, EcoProgress, have reduced electricity consumption 11 percent over a
few months.
• McDonald’s Sweden is using CO2 detectors in 24 restaurants to adjust
ventilation systems to the amount of customers in the store, reducing electricity
use 15 percent annually.
• McDonald’s Europe is serving salads in cardboard bowls instead of plastic
dishes, and wooden coffee stirrers instead of plastic.
• In the U.S., decreasing the weight of polypropylene cold cups has decreased
costs by 6 percent and saved nearly 1,000 tons of resin.
• Various anti-littering marketing campaigns have been implemented in Portugal,
Italy, Switzerland, the UK, Australia, Germany and other nations.
• A variety of different waste and recycling bins have been tested in certain
countries. A German model achieved a 90 percent recycling rate.
• Restaurants in Switzerland feature a separate receptacle for organic waste,
which is sold to Kompogas, which ferments the waste into biogas.
KFC
Marketing Strategies for driving Sales:
KFC, which sold its first franchise in 1952, is modernizing its restaurants, improving the
quality of its food, and focusing more on marketing--strategies that so far have pleased
operators by driving sales.
In addition, franchisees cite ongoing initiatives--like a move to plated meals, exterior
design upgrades, and more resources on menu innovation--as providing momentum for
further improvements.

Hiring the right people:


After KFC suffered from declining sales in 2000, the company brought Bachelder
onboard in February 2001 as the chain's leader. Previously she was the top marketing
executive at Domino's Pizza.
KFC has incorporated an updated exterior design that features a larger image of its icon
and founder, Col. Harland Sanders, "to create a focal point for customers from a long
distance" in almost half of its stores with plans to debut the look system-wide in three to
five years. Bachelder said the company is exploring dining room upgrades as well.
Advertising Strategies:
• KFC is good at taking advantage of any activity that might generate publicity. In
2008, KFC earned a lot of good PR, making a big deal out of moving its secret
recipe to a new location, which was apparently not such a significant event.
• In April 2009, KFC committed to fill 350 potholes in Louisville, KY. The only catch
is that Colonel Sanders will be legally allowed to graffiti on the ground
“Refreshed by KFC” stenciled drawings (KFC had assured the citizens of
Louisville that it is street chalk, so it’s not permanent).
• KFC has been changing its logo over time and their latest logo was revealed by
constructing a giant logo made up of “6,000 red, 14,000 white, 12,000 eggshell,
5,000 beige and 28,000 black” tiles. They seem to have tried to capitalize on the
popularity of programs like Google
Earth.

Menu:
• KFC franchises around the world are
not doing as good a job at
customized meals as McDonald’s,
but it is still doing well. In India, for example, where a big chunk of the population
is vegetarian. In order to capture that market, KFC at India has made the most
extensive veggie menu in the world.
• KFC is also planning on extending its menu
and giving out a new product line of
“Kentucky Grilled Chicken.”

Celebrity Endorsement:
KFC’s sales were suffering, so the company was

hoping its new line of Kentucky Grilled Chicken


could help lift its bottom line. To help spread the
word, it joined forces with the promotional juggernaut called Oprah, who announced on
her show downloadable coupons–good for a free 2-piece meal.
KFC also sends out open letters to
celebrities, offering to host their parties
for free. Jennifer Lopez was offered to
hold a VIP after-show party at a KFC
fast food restaurant.

PETA:
PETA, People for the Ethical
Treatment of Animals, an
organization founded in 1980
that is perhaps best known for
tactics such as throwing red
paint on fur coats and
comparing the slaughter of
livestock to the Holocaust.
PETA has been on a fierce
campaign against KFC,
charging that the company
treats chickens inhumanely, or at least allows its suppliers to.

PETA has used media savvy, a stable of celebrity advocates and a sophisticated
Internet operation to try to change the behavior of consumers and some of America's
largest corporations, including fast-food chains.

McDonald's, for one, made wholesale changes in the way it treats farm animals after
animal-welfare activists, including PETA, highlighted abuses. Burger King and Wendy's
did the same after PETA launched campaigns called "Murder King" and "Wicked
Wendy's."
What makes the KFC campaign unique is that the chicken chain has refused to submit
to PETA's demands, which include stopping the use of growth-enhancing antibiotics
and using gas, rather than electric shocks and sharp knives, to kill chickens. As a result,
company executives have been doused with fake blood, criticized by the likes of
Pamela Anderson, Al Sharpton and the Dalai Lama, and continually subjected to the
circuslike atmosphere of PETA protests at its restaurants.
PIZZA HUT
Pizza Hut’s Marketing
Strategies:
Pizza Hut has gone back to the basics with higher
quality ingredients, stronger promotions, and new
products with staying power. Following are some of
the marketing strategies by Pizza Hut:

Pizza Hut going green:


Pizza Hut is now trying to appeal to the health conscious. In August, 2008 The Dallas-
based Company has planned to launch a new “all-natural” pie made with organic
tomatoes, toppings made without artificial preservatives and a multigrain crust.
While customers are increasingly seeking options for more natural foods, they still love
pizza therefore Pizza Hut's offering the natural. It allows them to stay on the cutting
edge of food trends while delivering on the amazing Pizza Hut taste their customers
expect and demand. Even the boxes the pizzas are delivered in are being made from
75 percent recycled material.

Pizza Hut rolls out


Mobile Strategy:
In January, 2008 Pizza Hut introduced new
cell phone services that let customers order
from any of its 6,200 outlets nationwide via
either text message or the mobile Web. As
part of its bold strategy to tap into the mobile
generation, the Dallas-based company aims
to earn half its revenues from orders originating from computers and mobile phones
within five years.
It is worth noting that Pizza Hut is not the first pizza place to offer mobile ordering
services, but the company says its service is the broadest and most comprehensive.

Pizza Hut's leadership


position in the digital
space:
Pizza Hut has teamed up with up Warner Brother’s in
its quest to gain attraction for the new market segment i-e the movie-goers by
supporting the release of Terminator Salvation, a sequel to the Terminator movies.
Pizza Hut and Warner Bros. Pictures debuted five minutes of exclusive Terminator
Salvation footage that was available to be viewed on pizzahut.com, allowing anxious
Terminator fans to feed their curiosity (and their stomachs) all in one stop.
The Terminator Salvation footage from the film was available for fans to be watched
from May 11 - 30 and featured a sneak peak from the movie before it hit theaters on
Thursday, May 21. Alongside the exclusive footage, visitors had the opportunity to
instantly win a number of great prizes, including a life size Terminator T-600 model,
custom Terminator Salvation Xbox consoles, Terminator: Salvation video games,
Terminator Salvation Action Figures from Playmates Toys(R), and other licensed
products. Fans that had been made the new customers of Pizza Hut also had the
chance to watch movie trailers, download wallpapers, and order all their favorites from
Pizza Hut.

“Book It” Programs:


Pizza Hut has been a long time sponsor of the “Book It” program to encourage the book
reading in American schools. This has been done as the corporate social responsibility
to educate the children in the areas of the United States. Those who read books
according to the goal set by the classroom teacher are rewarded with Pizza Hut
coupons good for a free Personal Pan Pizza or discounted menu items.

Advertising Strategies:
• Successful Delivery to Space:
In May 2001, the world's first space-consumable pizza had safely reached the
International Space Station (ISS), where it was eaten by the astronauts living onboard.
Despite the unusual delivery address, the pizza, called "the culmination of nearly a year
of collaboration" between the company and Russian nutritionists, largely conformed to
the familiar recipe served up by some 12,000 Pizza Hut restaurants worldwide -- crust,
tomato sauce and cheese.
However, the vacuum-sealed space pizza was topped with salami rather than the
traditional pepperoni. Researchers found that pepperoni did not withstand the 60 day
testing process, a company release rather cryptically stated. After delivery, the station
crew baked the 6-inch ("personal pan") pizza themselves in the ISS oven.
Pizza Hut, a division of Tricon Global Restaurants, pioneered the commercialization of
space in July by paying to have its logo placed on a Russian Proton rocket.

• Promotion through Facebook:


As a company Pizza Hut launched the first Pizza Hut fan page on Facebook and in
October updated the page to add more features, including an application that allows
customers to order from Pizza Hut without ever leaving Facebook. Pizza Hut prides
itself on being innovators in the category, so embracing the latest social media tools is
something that’s in line with their company philosophy.

• Celebrity Endorsement:
In recent years, Pizza Hut has had various celebrity spokespeople, including
Jessica Simpson, the Muppets, and Damon Hill and Murray Walker. Recent
commercials have Queen Latifah providing the voiceover. Also in 1997, Pizza
Hut reunited "greatest of all time boxer" Muhammad Ali with trainer Angel
Dundee in a sentimental made for Super Bowl commercial.

Pizza Hut Park:


Pizza Hut Park is a multi-purpose facility, featuring a 20,500-seat
stadium in Collin County, Texas. It is expected that the stadium will
make a significant amount of revenue by hosting mid-sized concerts, as well as various
other sporting events, such as high-school football games. The stadium includes 18
luxury suites as well as a private 6,000-square-foot stadium club.

NEW STRATEGIES FOR KFC PAKISTAN


Get Rid of the ‘Fried’ Concept:
In today’s health conscious environment, it is essential for KFC to get rid of the negative
connotation attached with its name because FRIED is one word that ticks off the health
conscious faction these days. There are a lot of other ways to serve chicken like
roasted, grilled and smoked chicken and in order to cater to a wider target market; KFC
Pakistan should expand in these types of chicken too. This would greatly contribute
towards expanding KFC’s market share in Pakistan. It can even start offering Masala
Chicken and Tikka to customize its menu to cater to the Pakistani market. This will be
very useful because it can even attract those people who have a lot of money but are
not into traditional fast food.
Expand into other meat types:
Many people think that it’s time KFC should start offering types of meat other than
Chicken in Pakistan. Some fillet fish burgers are available in the menu but the choices
are limited there. Specifically for the Pakistani market, Beef can be a very good option
and beef burgers could be very popular because there is a general conception that beef
is a lot more healthier than chicken. KFC can also play around with the fish items in it’s
menu to cater to the more sophisticated audiences.
Variety in Menu:
The menu at KFC Pakistan needs serious revamping. The menu is very limited in terms
of salads, desserts, drinks etc and one gets bored trying the same thing again and
again. For example, KFC offers just two types of salads i.e Cole slaw and fruit salad.
Menu extensions are also rare. Snacks and side orders also include little more than
nuggets, rice and corn on the cob. There is a great potential for the variation and
extension in the menu and the way Pakistani customers have been reacting to fast food
in the last couple of years, we can surely say that it will be a success.
Coffee, Ice cream and Deserts- the new IN

trend:
McDonald’s has been diversifying into coffee and beverages all around the world but
outlets in Pakistan offer a little more than two flavors of milkshake and plain coffee. KFC
Pakistan can take the lead by at least expanding into a few different types of beverages
and take the lead. Other than this, KFC only offers a scoop of Walls ice cream at the
moment as a desert. With chains like Gloria Jeans and Gellato affair which specialize
solely in coffees and deserts, KFC should recognize that there is a great deal of
potential in the market for coffees and deserts and it can start by utilizing at least some
of it.
Expand into snacks:
During these times of recession and purchasing power parity, one strategy that can be
very beneficial for KFC is to develop a good, healthy and affordable range of snacks so
that people who can’t afford a full mean at KFC can rely on such items. Going out is not
always accompanied by eating out and KFC can develop itself as a place where people
can come, enjoy, socialize, have a drink or maybe grab a bite to eat. If KFC is the first
choice for somebody who wants to have a quick snack like Chicken strips or wings,
than those people are surely going to chose KFC for a full meal as well.
Drive-ins:
KFCs in Pakistan rarely have fully developed drive-ins which most McDonald’s offers.
Due to time constraints, drive-ins can be a great added advantage for any fast food
chain that offers it. KFC can try to redesign its current outlets by adding drive-ins if
feasible and should make sure that all future outlets have drive-ins and efficient drive-in
services.

Increase the hours:


With the passage of time, late hour socialization is becoming a trend and one way to
increase revenues is to increase the number of hours that the outlets remain open. But
this can only be done after KFC gets rid of the concept that it only serves full fledge
meals.

Advertisements:
KFC Pakistan rarely goes for televisions adverts and billboard adverts are used
whenever a new deal is out or there is an extension in the menu. Due to ongoing
economic slowdown and health conscious trends, KFC needs to reassure its customers
that it has all this in mind too. The most recent television advert of KFC used taste as an
appeal. Now KFC needs to advertise on TV as well as billboard and use health
consciousness, safety and affordability as an appeal. This will assure the customers
that KFC definitely knows what is going around and it will help them cope with it.
Corporate Social Responsibility:
Cupola group that owns KFC in Pakistan has been involved in a large number of
corporate social responsibility acts in Pakistan from educating the poor and teacher’s
training but it definitely needs to do more. Brands that support people in national
calamities are always remembered. For example, KFC can earn a lot of goodwill by
sampling directing its CSR efforts towards Swat IDPs or by helping earthquake or flood
affected. KFC can also emphasize that a certain portion of revenues will be contributed
for any specific problem and win people’s sympathies in this way.
Capitalize on social and national events:
KFC in our opinion should focus on becoming the national favorite brand. This can help
KFC earn a lot of incentive from the government as well. KFC should come with special
deals and discounts on national and social events like Eids, Pakistan day and
Independence Day so that people can actually relate with the brand.

Utilize the Internet:


During the past decade, internet usage has increased drastically in the country. The
youngsters are now at par with the global internet revolution and we will rarely find
somebody who has not experienced online blogging and social networking. Twitter,
Facebook, Orkut and My Space are as much popular in Pakistan as abroad. KFC
should now regard internet as the new means of interacting with its customers. Until
now, KFC has only been relying on minimal market research but we think now it’s time
KF should focus on making itself as customer centric as possible by directly interacting
with its customers through blogging and social networking because no feedback is as
valuable as the one that your customer delivers to you himself.
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