Brand Management

Assignment No.3
Levitt's ModeI



















Submitted by: Syndicate 1

Bhawana MaIhotra (11020541087) Ankit AgrawaI (11020541105)
Sathya Iyer (11020541120) Swati Thakur (11020541133)
Tapan Sharma (11020541135) Manoj MJ (11020541144)

LEVITT'S MODEL: AN INTRODUCTION




















The model, originated by 'Theodore Levitt' back in 1980, suggests why so many
marketing and experience efforts in the arts fall flat: because they never rise above
the generic expectations of the audience. n a nutshell, Levitt's model suggests
that all elements of a product, service, or experience fall into three
value categories for consumers: generic, expected, and augmented.

Generic elements are things every such product or service would offer (i.e.
you would expect every grocery store to have food for sale).

Expected elements are those things beyond the generic, but still expected from a
quality provider (you would expect a good grocery store to be clean, well stocked,
and well-staffed).

Augmented elements are the surprises, what Roan calls the ''wow'' that consumers
don't expect from the experience (having your standard monthly order waiting for
you in a shopping cart when you arrive at the store, for example).
When you try to differentiate yourself based on generic or expected values, you can
wind up screaming into the wind. Yes, we know you have a beautiful space with
thoughtful repertoire, extended program notes, and nice color photos of your artists.
We expect that from any cultural organization in your class. With these elements,
you can lose points for not providing them, but you can rarely gain points by
marketing them better. They're expected, tell me what else you've got.

Generic Product :
This is a product with basic functionality. As an example, a green jelly bean.
Nothing special about it - many competitors make green jelly beans. They
are all alike.

Expected Product :
or this product, the manufacturer adds all of the supporting stuff the
customer needs/expects to make this a real product. This includes things like
good quality - who wants a green jelly bean that tastes like lime one day and
dish soap the next? t also includes packaging, distribution, etc. So, you can
buy the green jelly beans in the store of your choice with the right number in
the bag, oh, and, you probably expect there to be red, black, orange, and
purple jelly beans too!

Augmented Product:
or this product, the manufacturer adds some "nice to have" features that
set it apart from the competition. or our example, the manufacturer could
supply a jelly bean dispenser in which you could carry your jelly beans
throughout the day and pop one after a good meal. Quite often, this step
involves "partners" - someone who provides a little more service or
complementing products. or jelly beans, perhaps the manufacturer partners
with a wine company who provides just the right wines to go with the various
jelly bean colors, or with a cook book publisher who publishes recipes for
jelly bean desserts.


PotentiaI Product:
The product becomes the potential product when it includes all functionality
the market is looking for. This is where the manufacturer becomes not just a
"supplier," but a partner with the customer. Our jelly bean manufacturer
becomes your partner by allowing you to call him in the middle of the night
when you run out of green jelly beans (you still have plenty of red, purple,
and orange ones...but you like green) and he delivers them to where ever
you are at that point. He comes on a Sunday to cook your jelly bean cake for
a dinner party. You have a love of key lime (not just lime) and he will design
a green key lime jelly bean for you. After you wake up, he makes your bed
and places green jelly beans on your pillow. He has become an indispensable
part of your life. His green jelly beans are now the complete "potential"
product and you are realizing ultimate satisfaction.
The point of the Whole Product Model is that "value" to the customer
increases as the manufacturer moves from the generic product to the
potential product. Competitive advantage also increases because you build a
closer and closer relationship to the customer. And, because of this, barriers
to entry increase.











Purpose of Report


McDonald's is one of the world's strongest and
most recognizable brands for its
"worId's best quick service restaurant
experience (Vandenbosch and Mark).
The purpose of this case study is affirming that
McDonald's brand extensions into new markets
are not always perceived with the same way of
local consumer. We try to evaluate the brand
repositioning options in a particular consumer
segment (business schools' students). n order
for McDonalds to successfully sustain their
brand in the local market, they must manage
their growth wisely, rely on the strength of their corporate brand, and consider what
their customers really think their brand is. At the end, they must make sure that the
extension of their brand into new markets brings meaningful perceived value to the
consumers they target.



History of Brand

The business began in 1940, with a restaurant opened by brothers Richard and
Maurice McDonaId in San Bernardino, California. Their introduction of the
"Speedee Service System" in 1948 furthered the principles of the modern fast-food
restaurant that the White Castle hamburger chain had already put into practice
more than two decades earlier. The original mascot of McDonald's was a man with
a chef's hat on top of a hamburger shaped head whose name was "Speedee."
"Speedee was eventually replaced with Ronald McDonald by 1967 when the
company first filed a U.S. trademark on a clown shaped man having puffed out
costume legs.

McDonald's restaurants are found in 119 countries

and territories around the world
and serve 58 million customers each day. McDonald's operates over 31,000
restaurants worldwide, employing more than 1.5 million people.

The company also
operates other restaurant brands, such as Piles Caf.










EvoIution of the brand

"When McDonald first began international operations it was essential to emphasize
those core functional attributes, because they were key to establishing McDonald's
position in the marketplace in the 1970s, when they opened their first restaurant in
London, the idea of service, of eating 100 percent pure beef hamburgers offered at
excellent value for money, in clean surroundings, simply did not exist. The
positioning of McDonald's as a restaurant which welcomed families, had high-chairs
and did not mind if children made a nose, was new and different.
By the early 1980s, quick service restaurants (QSRs) were being seen as more of a
pressured, utilitarian experience, not one that you could sit back and enjoy. So the
brand went into evolutionary mode, to reassert its competitive edge and address
some of the negative perceptions of the industry by focusing on our relationship
with customers.
Then from the late 1980s, as competition from companies like Burger King grew,
the brand strategy began to move again, aiming at a positioning based on the
unique role McDonald's plays in everyday costumers' lives.



McDonaId's Brand Communication

The target meaningful value of the McDonald's brand is:
"A break for Mom, Mom being appreciated by the famiIy, and she appreciating
the famiIy having fun."

So the brand positioning is not about hamburgers. They are just part of the family
fun experience but they are not part of that target experience. t's an experiential
brand positioning.




Successful brands are an important strategic alternative for companies to stand out.
They efficiently transfer to customers the meaning of product and make its
identification easier, as a basis for creating sustained competitive advantage and
more victorious strategic positioning.


Marketing at McDonaId's

McDonald's is one of the best known brands worldwide.
This case study shows how McDonald's aims to continually
build its brand by listening to its customers. t also identifies
the various stages in the marketing process.
Branding develops a personality for an organisation,
product or service. The brand image represents how
consumers view the organisation. Branding only works
when an organisation behaves and presents itself in a
consistent way. Marketing communication methods, such
as advertising and promotions, are used to create the
colours, designs and images which give the brand its
recognisable face. At
McDonald's this is represented by its familiar logo the Golden Arches.
n all its markets, McDonald's faces competition from other businesses.
Additionally, economic, legal and technological changes, social factors, the retail
environment and many other elements affect McDonald's success in the market.
Marketing involves identifying customer needs and requirements and meeting these
needs in a better way than competitors. n this way a company creates loyal
customers.

The starting point is to find out who potential customers are not everyone will
want what McDonald's has to offer. The people McDonald's identifies as likely
customers are known as key audiences.The marketing mix and market research
Having identified its key audiences, a company has to ensure a marketing mix is
created that appeals specifically to those people. The marketing mix is a term used
to describe the four main marketing tools the 4Ps.

By analysing detailed information about their customers, as derived from ongoing
market research, the McDonald's Marketing department can ascertain information
key to determining the correct marketing mix.

1) Which products are well received
2) What prices consumers are willing to pay
3) What TV programmes, newspapers and advertising consumers read and view
4) Which restaurants are visited

Accurate research is essential in creating the right marketing mix which will help to
win customer loyalty and increase sales. As the economy and social attitudes
change, so do buying patterns. McDonald's needs to identify whether the number
of target customers is growing or shrinking and whether their buying habits will
change in the future.

The 4Ps

i. Product
The important thing to remember when offering menu items to potential customers
is that there is a huge amount of choice available to those potential customers with
regard to how and where they spend their money.
Therefore McDonald's places considerable emphasis on developing a menu which
customers want. Market research establishes exactly what this is.
However, customers' requirements change over time. What is fashionable and
attractive today may be discarded tomorrow. Marketing continuously monitors
customers' preferences.n order to meet these changes, McDonald's has
introduced new products and phased out old ones over time, and will continue to do
so.
or example, the launch of a new product will typically involve television and other
advertising supportAt any time a company will have a portfolio of products, each in
a different stage of its cycle. Some of McDonald's options
are growing in popularity while arguably the Big Mac is at the 'maturity' stage.

ii. Price
The customer's perception of value is an important determinant of the price
charged. Customers draw their own mental picture of what a product is worth. A
product is more than a physical item; it also has psychological connotations for the
customer.The danger of using low price as a marketing tool is that the customer
may feel that a low price is indicative of compromised quality. t is
important when deciding on the price to be fully aware of the brand and its integrity.
A further potentially adverse consequence of price reduction is that competitors
match the lower prices resulting in no extra demand. This means the profit margin
has been reduced without increasing the sales.

iii. Promotions
The promotions aspect of the marketing mix covers all types of marketing
communications.One of the methods employed is advertising, sometimes
known as 'above the line' activity. Advertising is conducted on TV, radio, in cinema,
online, using poster sites and in the press for example in newspapers and
magazines. Other promotional methods include sales promotions, point
of sale display, merchandising, direct mail, telemarketing, exhibitions, seminars,
loyalty schemes, door drops, demonstrations, etc.The skill in marketing
communications is to develop a campaign which uses several of these methods in
a way that provides the most effective results. or example, TV advertising makes
people aware of a food item and press advertising provides more detail. This may
be supported by in-store promotions to get people to try the product and a
collectable promotional device to encourage them to keep on buying the item.


iv. PIace
Place, as an element of the marketing mix, is not just about
the physical location or distribution points for products. t
encompasses the management of a range of processes
involved in bringing products to the end consumer.

CONCLUSION

n McDonald's nnovation Centre there are several fully functioning restaurants. As
staff prepare and cook meals, others act as customers.
The signs are that McDonald's is getting serious about sandwiches. Their
experimental "Oven Selects range, freshly made and toasted to order, is now going
on trial at some 400 restaurants in America. f the sandwiches, which will sell for $4
each (relatively expensive for McDonald's), are a hit, they could become a global
product.
Moving into the sandwich business means that McDonald's will compete more
directly with the likes of chains such as Subway, and against countless corner delis
and supermarkets. "Sandwiches outsell hamburgers by ten to one, says Russ
Smyth, president of McDonald's Europe. "So there is a great opportunity here.
McCaf, is already providing coffee lounges inside 500 existing McDonald's
restaurants. Some of these are being fitted out as wireless hot spots for the
internet.
After all, if you look at the total volume of hamburger restaurant meals consumed,
McDonald's accounts for about three quarters of them. Alternatively, in the USA,
where the competition is more aggressive, heightened by price-cutting, market
share is much lower.
The greatest potential weapon in our armory in terms of building the brand for the
future is to continue to reinforce that emotional connection.