McDonald’s and Starbucks are in the business of selling an experience. The marketing sections/divisions for both companies have tapped into the human psychy and provided customers with a glimpse of things they didn’t even know they needed. When one walks into McDonald’s they are instantly transported back to a happier time when they were children eating happy meals after soccer practice, while Starbucks creates such a comfortable yet sophisticated ambiance customers leave with a sense of motivation. This is the magic of marketing. This is why, even if you don’t like McDonald’s, you are still secretly waiting for the 100 Billionth person to be served. Provide the customer with an experience and they woln’t even know why they are coming …show more content…
This has become a stroke of marketing genius. Allowing local entrepreneurs to invest in the McDonald’s franchise has allowed McDonald’s to adjust their look and menus to fit the customer’s preference whether domestic or abroad. Panos Mourdoukoutas (2012) of Forbes magazine defined the McDonalds’ marketing strategy by franchising as “adaptation and innovation, coming up with fresh products and services to address the needs of a diverse consumer market—as shaped by demographic, economic and local factors around the world” In addition, franchising allowed McDonald’s to exploit the talents of franchisees. For example, some of the most popular sandwiches (including the Big Mac, Filet-o-Fish, and Egg McMuffin) were invented by McDonald’s franchisees. (Kreutzer, M. 2012) One misstep committed by McDonald’s as part of franchising was expanding globally to quickly without a specific plan. “McDonald’s took their US business model and tried to export it. It didn’t work because of brand recognition, different cost structures, cultural differences and laws.” (Mathia, …show more content…
(Our Heritage) Today Starbucks has over 21,000 stores througout 65 countries, and is the lead roaster and retailer of specialty coffee in the world. (Our Heritage) Starbucks provides an upscale environment backed by quality service. They perfect the sophisticated ambiance that is so prevalent in large socialite societies. They make the average famer in Iowa feel like he or she just stepped into a coffee shop in New York city. This experience is what drives customers back again and again. Starbucks was initially reluctant to dive into the world of franchising but gave in due to the continual change in the marketplace as discussed previously. (Janowicz, E. 2013) Starbucks owner Howard Shultz developed an idea of a “third place,” one in which he believes that consumers occupy three places, work, home and the third place. (James, J. 2013) Starbucks has been activily strive to be the third place for consumers all over the world through creating a pleasant experience and mass expansion. Starbucks leads the world in specialty coffee drinks for a reason, mass expansion. It is known that in large cities such as New York and Chicago, there are starbucks stores across the street from each other. This form of mass expansion led to large profit gain, but sometimes when moving to fast a company can lose sight of their objective. Despite the pleasant surroundings, great quality, and delicious
The company’s founder and CEO, Howard Schultz, has been successful in creating Starbucks into something that we didn’t really know we needed until we had it. He has meticulously crafted a brand for the company that adds a psychological value to its offerings. Thereby, when you buy a cup of coffee at Starbucks, you buy an experience. The somewhat quiet, not-so-rushed atmosphere along with dimmed ambience and friendly staff found at Starbucks’ stores add a feel-good factor to your purchase. As a result, people are willing to pay a premium for coffee at Starbucks even if McDonald’s were running a promotion offering free coffee. The premium prices translate to superior margins for its investors.
Starbucks in today’s date is the world’s largest coffee chain. The brand which was founded in 1971 has established itself as the world’s leading specialty coffee brand with its more than 13000 outlets in 39 countries. The company has had an impressive record of sales and growth also. Something that differentiates Starbucks from others is its coffee as well as the special Starbucks experience. Starbucks serves more than just coffee. It is also known for the relaxing ambience where the customers can relax and sip with their friends. Starbucks is famous for its genuine service, inviting atmosphere and of course superb coffee. The company is committed to quality and it is due to its commitment to quality that its product pricing is also premium. However, despite the premium prices of its products the brand is loved around the world by the customers for the quality of products that it serves.
1. Recognize the need for change. What problems do you see now or foresee in the future, that will lead to a down turn for Starbucks.
As a customer you pay for what you get, meaning the money and time you put into these goods or service you seek to have the product you believe to be a good value and fulfill your needs, while also having quality service. Now that we have the definition we can show how these companies exhibit value based marketing. McDonalds, which was founded in 1955 is one of the world 's largest chain in fast food. Seen on television commercial, bulletin boards, newspaper, and even on your local bus. Their products consist of hamburgers, fries, nuggets, breakfast sandwiches, and drinks. They were not really recognized for coffee until they introduced their McCafes. McCafes are a variation a hot drinks, from espressos, smoothies, milkshakes, and lattes lattes. McDonald 's provides customers with deals of if make a purchase of 5 McCafes drinks you get 1 free in the app. With doing this you have now introduce customers to an app where they can also explore other McDonald products and get deals as well. This encourages customer to buy more products because of how affordable they
According to Royle (1999) McDonald’s is a very large multinational enterprise (MNE) and the largest food service operation in the world. Currently the company has 1.5 million workers with 23,500 stores in over 110 countries with the United Kingdom and Germany amongst the corporation’s six biggest markets, and over 12,000 restaurants in the United States. In 1974 the United Kingdom corporation was established and in 1971 the Germany corporation was established, currently the combined corporation has over 900 restaurants and close to 50,000 employees in each of these countries (Royle, 1999).
Koehn, N.F., Besharov, M.A., & Miller, K. (2008). Starbucks Coffee Company in the 21st Century. [Case study]. Boston, MA: Harvard Business School Publishing.
McDonald’s has proven over time that the business practices they utilize work well and have led them to obtaining the title of the largest food retailer in the world. The founder of the company made a tactical decision in franchising the idea of providing fast food at a cheap price. Today, fast food has become a staple of not only American life but a viable food option all over the world. For McDonald’s a critical factor in them reaching the level of growth they currently experience has been franchising. It can be assured that McDonald’s will continue to grow through the usage of the franchising techniques as new food markets continue to develop all over the world.
With clear core values towards providing quality coffee, the best service, and atmosphere, Starbucks has enjoyed great success since it was founded 30 years ago. The company has being doing very well for last 11 years with 5% or more store sales increase, even with the rest economy still reeling from the post-9/11 recession. However recent research, conducted to Starbucks, have showed some concerns regarding company’s problem meeting customers’ expectations.
One of the main problems that Starbucks is facing at the present time is the ability to maintain national competitive advantage (Monash South Africa, 2014). Due to their local demand conditions, Starbucks tries to satisfy all customers by trying “to inspire and nurture the human spirit – one person, one cup and one neighborhood at a time” (Starbucks Corporation, 2014). Local demand conditons consist of a company trying satisfy needs of their closest customers and expanding their competitive advantage by upgrading their strategic management policies (Monash South Africa, 2014).
In 2002, unexpected findings of a market research showed problems regarding customer satisfaction and brand meaning for Starbucks customers. The situation was unacceptable for a company whose overall objective is to build the most recognized and respected brand in the world. Starbucks was supposed to represent a new and different place where any man would relax and enjoy quality time, alone or with others. But the market research showed that in the mind of the consumers, Starbucks brand is viewed as corporative, trying to expand endlessly and looking to make lots of money. This huge gap between customers' perception and Starbucks' values and goals called for immediate action.
McDonald's Corporation is the largest fast-food operator in the World and was originally formed in 1955 after Ray Kroc pitched the idea of opening up several restaurants based on the original owned by Dick and Mac McDonald. McDonald's went public in 1965 and introduced its flagship product, the Big Mac, in 1968. Today, McDonald's operates more than 30,000 restaurants in over 100 countries and have one of the world's most widely known brand names. McDonald's sales hit $57 billion company-wide and over $25 billion in the United States in 2006 (S&P).
Firstly, McDonald’s paid attention to the children in every country. They have built “happy land” for them and offered the “happy meals” with innovative toys to them. Since children is one of the biggest consumer groups to McDonald’s, and they have created a place with “happiness” culture to attract the children. It is a successful decision that building a business by focusing on the children since it can encourage the whole family to come to McDonald’s.McDonald’s is not only selling the happy meal to the children, but also selling American culture to them, it is a proper strategy to build the brand loyalty from th...
In addition to being best-known supplier of the finest coffee and promising only the highest quality products, Starbucks emphasizes firm values, provides guidelines to enhance employee self-esteem. This is to ensure continued customer satisfaction. Moreover, diversity has become a priority to providing an inviting environment to all consumers. Starbucks continues to abide by a strict, slow growth policy in which they set out to dominate a market before moving on to expand, thus history has shown this strategy to be successful for Starbucks, making them one the fastest growing companies nationwide.
Compare the globalization approaches of Starbucks & McDonalds The parameters to be used for this comparison are:
The McDonald’s Corporation case study take a comprehensive look into the competitive market of the fast food industry. Particularly, McDonald’s and some of it greatest fast food competitors. In this analysis I will be revealing the marketing strategies of McDonald’s and other fast food companies. Identifying the trending tastes of consumers in this market, tactics used by McDonald’s competitors such as Wendy’s and Burger King to one up the marketing strategies of McDonald’s. I’ll also be assessing the strength, weaknesses, opportunities and threats of McDonald’s in this market segment. Evaluating the consumer purchase decision process and purchase type in the food industry. Lastly, I’ll explore which growth strategies I believe would make the