With the different fast food enterprises that are found across the whole world, different factors are put together to make sure that the business becomes a success. In order for a fast food business to survive with todays markets and competition unique procedures need to be followed that will make the business have an advantage over the competition.
In this report I will be looking into two competing fast food brands that both cater to the same market. I want to observe which business has a batter success rating and which business would need tips in how they could change certain things and where are they lacking the most that contributes to profits being lost. In order for me to receive the best results from the research I have to do, I will be comparing the results I found of both restaurants with each other to see which one is lacking and which one is doing the best in market. Before making any comparison about the two fast food establishment it will be needed to first get some background information on both entreprises to see where the company comes from and the improvements that needed to take place for the company to get where it is today in the market.The first fast food establishment I will be looking at will be McDonalds, I had chosen McDonalds because it is one of the worlds most wealthy fast food enterprise. I want to see how McDonalds became such a wealthy and one of the most loved fast food establishment but yet it offers the same products as other fast food joints but has less products then other fast food establishments.
The second establishment that I will be looking at will be Burger King, I had chosen Burger King because of how many years its also been in the industry, it has shown to be a fast food business that offers different products that would attract both parents and teenagers but yet it has not yet reached the same level of success that other fast food establishments have not reached for example McDonalds.
Both McDonalds and Burger King are fast food establishments that target the same main target market which is children and young adults. Both these establishments offer to customers relatively the same menu for example Burgers, Chips and Coldrinks. Yet there is always that one company that will do batter then any other company. In order for a fast food establishment to have an upper hand against its competitors there must be something that the business is doing different from others.
I believe marketing is one way to make sure that potential customers become interested in investing their time and money in the business. Marketing is defined as the on-going activities of the business to reach the target market and the methods the business utilises to connect and engage with its target market.
Background of McDonalds:
McDonalds was first established in 1948 by the McDonald brothers named Maurice Richard who started the restaurant in California, USA. McDonalds was the first fast food enterprise that started with a self-service counter, that means meant no waiters or waitresses. McDonalds had to create specialised tools in order to meet the required service that they wanted to achieve. Though McDonalds was started by two brothers at the end it was taken from the two by Ray Kroc, he saw an opportunity and took it. Ray seeing an opportunity that the business could upgrade he wanted to turn McDonalds into a franchise business. Ray seeing that the brothers are not willing to give him a stake of the business, in 1961 he eventually bought the brothers out of the business and took full control of the business.
McDonalds started to go international which led to the business coming and starting other restaurants in South Africa. The first McDonalds to start was in November 1995. Today McDonalds is found in every province in South Africa, there is no mall that one can go and not find a McDonalds, there is over 200 restaurants that can be found and serves over 8 million customers per month. McDonalds gives back to the economy of South Africa by employing over 10 000 South Africans, 80% of all food served in McDonald restaurants are produced by local South African suppliers. McDonalds South Africa is open 24/7, is environmental friendly LED lighting and brought drive through to South Africa.
McDonalds uses manila, which means that it is always successful at adjusting to local tastes which makes McDonalds more customer friendly to all countries which it establishes itself. McDonalds has created different meals that cater and attract different customers to make sure they appeal to the traditional people around the area.
McDonalds has improved from one shop to over 35 000 locations and in more then 100 countries. McDonalds is one of the worlds most successful fast food establishments because of the key factors that it follows throughout every establishment. Consistency is the key thing no matter what McDonalds you go to you will almost have the same experience , same food same taste, the only difference from McDonalds is the staff behaviour which is a weak point, ‘’ Quality, Service, Cleanliness and Value’’ is the motto that every McDonalds must uphold. Innovation (Quote: ‘’ innovation stemming from responsiveness to customers and franchises has played a big role in McDonalds fending off stagnation over the years’’)is another key factor that McDonalds has brought in, innovation is not to bring in a different product but change the way that the product or service is delivered or even bringing in new products, new things need to be added in every business, McDonalds has brought in new products to cater to kids, cater for Muslims and vegetarians , and also cater for people who have busy schedules. Examples of products that McDonalds brought in is, Happy Meal, Filet-O-Fish, Big Mac, Egg McMuffin and McFlurry.
McDonalds over the years moved more and more to getting families to come by using the biggest advantage by going after kids because if kids love a restaurant they bring parents which ends up bringing the whole family meaning more profit for the business.
Background of Burger king:
The predecessor to Burger King was founded in 1953 in Jacksonville, Florida, as Insta-Burger King. After visiting the McDonald brothers original store location in San Bernardino, California, the founders and owners Keith J. Kramer and his wife’s uncle Matthew Burns purchased the rights to two pieces of equipment called ‘’Insta” machines and opened their first restaurants, based around a cooking burger, they required all of their franchises to use the device. When the company was going through a rough patch on 1959 it was purchased by its Florida franchisees, James McLamore and David R. Edgerton. After buying the brand they started a corporate restructuring of the entire business they started by changing the name. They made the restaurant into a separate entity and ran it for 8 years before they sold it to the Pillsbury Company in 1967.
The new management tried to the change the business multiple times, but success only came after Burger King hired Donald N. Smith in 1978, so he could come with fresh new ideas of how they could change the business to the batter. The company was changed, and a corporate revamp happened throughout the whole business in a plan called Operation Phoenix. Changes included updated franchise agreements a broader menu, and new standardized restaurant designs. Smith soon left to start a new journey in his career at a new company called PepsiCo in 1980 soon after Burger King sales went down. Brinker Vice President of Restaurant Operations was hired by Burger King to turn the brand around and to help the restaurant against its main rival McDonalds. In 2010 Burger King was bought for 4 billion dollars by a private firm called 3G Capital, which surprisingly led to a recovery that started making the business successful. In 2014 Burger King formed a new publicly traded company called Restaurant Brands International which happened after Burger King started a partnership with Canadian coffee staple Tim Hortons.
Burger King had done history in 2017 by outperforming McDonalds with significant margins. The company 3G Capital is the reason why Burger King had such success they say that they only had to do two things which was trimming business fat and simplifying its public image. These two factors led to its success operating margins grew from 24% in Q2 2011 to 40.2% by Q4 2016. Burger Kings money comes from three main things royalties, franchises and royalties come from a percentage of revenue from each unit, by 2018 every Burger King joint is a franchise. Burger King is the worlds second largest fast food chain in the United States behind of course McDonalds. There are 10,400 franchises that can be found in all 50 states of America and can be found in 56 countries, each day the company serves 15 million people with over 2,4 billion hamburgers sold.
Burger King seeing opportunities such as McDonalds moved productions also to South Africa, the first burger King restaurant opened in South Africa on May 2013. Burger King had joint forces with Western-Cape- based investment company, Grand Parade Investments and Burger King Worldwide, till this day more and more Burger King joints are opening and are growing exponentially through South Africa.
Marketing of McDonalds:
Though being one of the oldest fast food joints that could be found McDonald sees how technology is taking over, it innovates a lot on social media. It uses social media apps such as Spotify and Instagram. The Spotify channel features playlists that align to McDonalds mealtimes, while the Instagram is full of creative, artistic- fry posts and also user generated images.
As soon as going inside a McDonalds franchise you will see that they show to customers the nutritional value of the food being bought, it also gives links where people can see what exactly is in the food they eat, this is a great way to answer questions that the customers might have. As soon as entering the the website it will tell you the health options that could be found when going to McDonalds, the site will also tell you about the suppliers that they use. Having this type of website brings some sort of relief to customers, making them put a sense of trust into the business.
McDonalds visual content has some sort of humour to it which attracts people, and they re-use this visual contact across all the platforms that they use. McDonalds blog and text-based content has a new fresh voice that can be used across social media to attract new customers and re-assure existing customers. McDonalds also uses events that are happening in the world or country to their advantage, using hashtags that would bring buzz such as the hashtag #McdOneGoal World Cup. McDonalds does not only use social media to advertise itself it also uses television adverts and billboards.
The one key factor that McDonalds has is that it attracts to kids which leads to families coming to the joint. McDonald advertises to kids and families , McDonalds invests tons of many a year in advertising and the Franchising Model. McDonalds spends about 2 billion dollars in advertising , McDonalds has three goals when advertising make people aware of the item, feel positive about the item and remember the item, for example the toys that children receive when buying a happy meal. McDonalds came up with ways they can advertise themselves across the world by the most memorable way such as the golden pillars and the famous clown that is recognisable to everyone that has ever gone to a McDonalds until late 2014.
Marketing mix (4 p’s):
Customers can order for themselves with digital computers.
Focuses on psychological pricing strategies
Reduced prices, for example in India prices were taken down by 25% so customers can prefer eating there.
Offers discounts or bunding on certain products and combination of different menus
Found in 110+ countries
Operates in 36 000 restaurants
Mc Drive locations are near highways
Kitchens divided into vegetarian and non-vegetarian zones
Marketing of Burger King:
Every business these days can be found online because society is moving more and more into technology, Burger King is no exception of this. Burger king uses social media hashtags as well to attract customers such as #chickenredemption campaign. With businesses when coming to advertisements sometimes makes the mistake of focusing too much on advertising campaigns and forgets that it’s a business and should focus more on delivering the product, though Burger King advertises it still focuses more on delivering the food, it is more focused on giving quality to customers.
Unlike McDonalds, Burger Kings virtual presence doesn’t appeal as much as McDonalds looking out dated, but the website does shine light on their commitment to customers, food and the environment, but still lacks at giving examples. Burger King loses to McDonald when giving out information on the nutritional value of their products or sources where they food comes from. Burger King has to update its websites about food and nutrition, to make customers more relaxed and trusting of the business. Though Burger King does advertise on Television ,its paper advertising is weak such as using brochures or billboards to spread out the name of the business to attract new people.
Burger King on social media has a good presence because of the inviting user content. For example its Instagram account they tell customers to #burgerking. Like McDonalds, Burger King also employs a friendly, laid back tone of voice that’s playful and funny for example who remembers ‘’Wake up with King’’ it’s an advertisement which was going viral because of the relaxed friendly atmosphere which it gave out. Again, McDonald beats Burger King with its online presence.
The target market of Burger King differs from ages 15 to 40 years old in developed countries. Though the main target market for Burger King like McDonalds is to focus on attracting kids because as soon as you attract kids parents follow so families are there. Burger King spents between $402 million and $ 497 million on advertising on television and social media .
Chicken and Fish
Salads and veggies
Market – oriented Pricing Strategy
Websites for deliveries
Almost in all big cities
At residential areas, malls
Description of product on paper nuts placed in the trays.
Successful fast food franchise:
McDonalds is the most successful brand when comparing it to Burger King. The reason I say that is for a broad amount of reasons. Firstly McDonald has 36 000 establishments that are found in 120 countries and serves more then 65 million meals each year while Burger King is found in 15 000+ establishments. Secondly branding, McDonald is loaded with brand images that are embedded into the heads of its customers, McDonalds was able to do this by the constant advertising it did and by attracting kids the most making themselves look like a family friendly establishment. Thirdly McDonalds knows how to make itself unique to give competion to the competitors for example when the McGriddle came out people thought a pancake sandwich wont work out but until people tasted the product they minds changed completely. Fourthly McDonalds speaks to children, they built a strong relationships in their brand by marketing directly to children and giving them something they would be into. Fifthly McDonalds likes to be the first when starting something in the fast food industry for example they were the first restaurant to allow that in their stores. Fifth McDonalds is one of the most recognisable restaurant in the world, the Golden Arches is the most recognisable symbol of McDonalds.
Recommendation to unsuccessful business:
The first thing is believe that Burger King needs to improve on is customer loyalty, this could be done by giving discounts on certain people for example saying people who are over 60 years will get a 10% discount on his meal. Burger King must also improve on its marketing strategy to attract new customers to the business for example also advertise on every platform start sending out pamphlets, more television adverts, start sponsoring certain events. Burger King must see that the best customers to attract is children, Burger King can start offering play areas for kids and bring in toys that kids would enjoy. Burger King must also to find more locations that it can work at making it convenient for customers. Burger King must bring in a menu that accommodates for vegetarians, Burger King could one of the few establishments that sells Halaal meat that would bring in a new breed of customers.