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Success of mcdonalds franchise history
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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
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
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.
McDonalds also uses diversification in its global marketing. McDonalds recognizes that different countries have different values, customs, and tastes. Therefore, McDonalds satisfies these diverse global tastes by diversifying the menu according to each country’s unique preferences. This added diversification tactic, allows McDonalds to stay competitive in a global market. Examples of McDonalds globally diversified menu would be that McDonalds offers an exclusive beefless menu to its customers who live in India. This is because eating beef in India is sacrilegious. To meet the tastes of customers in India, McDonalds created new offerings such as the “Pizza McPuff” and the “McVeggie.” McDonalds considers the cultural tastes in every country it opens its doors
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).
Schultz, H. (2011). Onward: How Starbucks fought for its life without losing its soul. New York: Rodale.
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.
Starbucks is currently the industry leader in specialty coffee. They purchased more high quality coffee beans than anyone else in the world and keep in good standings with the producers to ensure they get the best beans. Getting the best beans is only the first part, Starbucks also has a “closed loop system” that protects the beans from oxygen immediately after roasting to the time of packaging. They did this through their invention of a one-way valve which let the natural gasses escape but keeping oxygen out. This gave them the unique ability to ensure freshness and extended the shelf life to 26 weeks. Starbucks isn’t only about the coffee, it’s also about a place where people can escape to enjoy music, reflect, read, or just chat. It is a total coffee experience. The retail outlet has been responsible for much of Starbucks growth and has contributed substantially to their brand equity.
McDonald's is planning to capitalize on the public's willingness to pay $4 for a cup of coffee by hiring baristas and dropping espresso machines in 14,000 of their fast-food outlets. Meanwhile, Starbucks, with business lagging, is fighting back with an "if you can't beat 'em, join 'em" strategy, by offering heated breakfast sandwiches and adding drive-thru windows to some of their locations.
McDonald’s vision statement can be said that it wants to be the world’s best quick service restaurant experience. Being the best for McDonald’s means that it needs to provide the best of the quality of food products, services, and cleanliness and value so that it can make everyone of its customer smile (Schmitt and et.al, 2011). A vision statement of the company is an idea for how business can be eventually perceived and what actions it will be taking for coming 5, 10 or 15 years for i...
The Starbucks Corporation is built around an experience, the Starbucks experience. While the Starbucks experience is most notably associated with the way customers are treated, one could argue however, that the Starbucks experience transcends just the way customers are treated. The Starbucks experience is an all encompassing culture that revolves not just around customers but also to employees, or “partners” and suppliers. Burks (2009) notes that the company cares about the footprint it leaves, no matter where it does business; “the company is dedicated to making positive contributions to the communities where it doe...
One could argue that this could be imitated by competitors but it also is very costly. Another strategy is their strategic alliances and acquisitions such as Teavana (Tea), Bay Breads, Evolution Fresh, and many more. Their acquisition strategy has known to be very horizontal. This gives Starbucks the ability to effectively leverage their cornerstone product differentiation strategies by offering a premium product mix of the highest quality beverages and snacks. Starbucks’ goal is to provide each and every customer with a unique “Starbucks Experience” excellent customer service, and well maintained stores which in turn translates to a high degree of customer loyalty. Its HRM value-based approach is for building strong internal and external relationships with suppliers which helps its deployment to international markets, horizontal integration, and organic expansion across the world. Starbucks is known for its high knowledge employees. Human capital is the main asset for most companies and they are provided with great benefits, stock options, retirement accounts, and competitive pay. Good human capital translates into great customer service. I talked to my friends about working at Starbucks and they both said it
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.
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.
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).
Overall, McDonalds are able to reach customers all around the globe and they market their products inexpensively. According to Naim (2001, p. 1) it is acknowledged that, “McDonald 's is a global brand, but we run our business in a fundamentally different way that ought to appeal to some critics of globalization. We are a decentralized entrepreneurial network of locally owned stores that is very flexible and adapts very well to local conditions. We offer an opportunity to entrepreneurs to run a local business with local people supplied by a local infrastructure. Each creates a lot of small businesses around