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Product pricing and strategies
Product pricing and strategies
Product pricing and strategies
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Starbucks vs. Dunkin Donuts vs. McDonalds Coffee, one of the world’s most known beverages. Seen being drinking at work places, colleges, or in the convenience of your own home. There are a variety of companies that provide us the people with coffee. It can be your local market, bakeries, or even fast food places. 3 places that stand out and our known very well for supplying Americans with coffee is Starbucks, Dunkin Donuts, and McDonald’s. From their strategic advertising, deals, and even straight down to the design of their cups, they meet the definition of marketing. We will be examining these 3 companies using the marketing mix which consist of product, price, place, promotion and also cover value based marketing and see how these companies meet these definitions and how they satisfy their customers as well. …show more content…
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
The larger serving size of Great Cups of Coffee is perhaps the most apparent gage that will improve appeal for the company’s customers. Receiving extra of a proportionately quality product for a comparable price obviously works as an enticement for customers to prefer Great Cups more than the opposition. While customers identify with a better quality and superior taste with fresher coffee, Great Cups supports its effective model of serving coffee that has been roasted no more 72 hours ago and that is blended and ground right at the store. Great Cups also provides as an unintended marketing method community bulletin boards and assists with book club gatherings as well as
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 McCafe, offers new products to the traditional menu of McDonalds. McCafe specializes in a variety of different types of coffee as well as smoothies, which attracts new customers that might not otherwise come to McDonalds for its burgers and fries, and gives McDonalds an edge over the competition by offering products that are different than the competition. McCafe is its own entity as well as it holds its own specific area in most McDonalds restaurants.
McDonald's also focuses on the perception of value within it line of products and therefore takes care to price its menu items accordingly. Different products are priced differently depending on which target audience those items appeal to most. An extensive value menu is an essential part of any fast-food menu in recent years. The prices and products within the value menu can prove to be areas that will make or break a fast-food companies' year depending on the competitions value menus.
Starbucks Coffee, Tea, and Spice opened its first store in April 1971 in the Pike Place Market in Seattle, by owners who had a passion for dark-roasted coffee that was popular in Europe, but hard to find in the U.S. (Harrison et al., 2005; Venkatraman & Nelson, 2008). The company’s mission was to provide Seattle with the best access to dark-roasted coffee, and sought to educated customers about the product. As a matter of customer education and acceptance of the product, Starbucks grew and expanded into the successful domestic market it is today. Much of this success can be attributed to a focus on the total customer experience and s...
This strategic capitalises on weaknesses since will decrease the cost of coffee beans/beverages but also Starbucks operating cost which they regularly ship across the world to various stores. Starbucks can capitalise on this weakness to improve their brand options. It adds value in the inbound logistics activities, operations and procurements. Starbucks should consider this option since it will decrease their operating cost and therefore will reduce the prices on their menu. The attractiveness is the exact same as mentioned in option 1.
For this product the McDonalds need to use sales promotion strategy. The reason for this is that is most likely product in McDonalds and that is also not very expensive so they just need to add this products with other and sell that into a deal product.
Compare the globalization approaches of Starbucks & McDonalds The parameters to be used for this comparison are:
Strategic management is the way of implementing different business strategies and plans to attain certain specific aims and objectives. It involves collection of decisions and different rules and policies that tend to define the results that are generated in the form of better business performance. For undertaking these activities, management should possess an in depth understanding and be able to assess the general and competitive external and internal business environment to take proper business decisions (Cornelis, 2010). McDonalds is an organization that offers a range of products and services in a very effective manner that makes it a market leader in providing fast food services all over the world. By enforcing suitable strategies, McDonalds can increase its level of sales and will also help in upgrading as well as sustaining the market by acquiring competitive advantage (Schoenberg, Collier and Bowman, 2013).
The McDonald's Corporation is the largest chain of fast food restaurants in the world. It is franchised in over 119 countries and serves an average of 68 million customers daily. The company started in 1940 as a barbecue restaurant operated by Richard and Maurice McDonald in the United States. They reorganized their business as a hamburger stand in 1948. In 1955, Businessman Ray Kroc joined the company as a franchise agent. He purchased the chain from the McDonald brothers and oversaw its global-wide growth (McDonald’s 2014).
As it is demonstrated in the previous factor, the coffee purchasing strategy is quite important for the company’s development due to they must do big efforts in factors such as marketing with the objective to attract new customers, and the company must investigate carefully the market where it is operating to analyze their competitors and their different
The main problem from McDonald's case, McDonald's Polishing the Golden Arches, is how to classify McDonald's strategy through Plan to Win into one of the five generic competitive strategies. Before we solve this main problem, we should determine the chief economic and business characteristics, the five forces analysis, and also the driving forces of the fast-food industry. After that we identify the strengths, weaknesses, opportunities, and threats by using SWOT analysis. Finally, we classify McDonald's strategy into one of the five generic competitive strategies.
I would give Howard Schultz a grade of A for the job he has done as the CEO of Starbucks. He has successfully performed all the 5 tasks of strategic management discussed in Chapter 2.
McDonald's is the world's leading food service retailer with more than 30,000 restaurants in 118 countries serving 46 million customers each day. It is one of the most well-known and valuable brands and holds a leading share in the globally branded quick service restaurant segment of the informal eating-out market in virtually every country in which it does business. Problems Faced By McDonalds And The Public Opinion Of McDonalds For many years, McDonalds enjoyed worldwide success built on a few well-known, highly standard conditions. The company with the Golden Arches served a simple menu- hamburgers, French fries, and milkshakes or soft drinks. The food was priced low, its quality was consistent, and it was served speedily from establishments that all looked alike and were extremely clean. However in recent years, McDonalds has seen its growth rate slow down and its dominant market position slip. There are various reasons for this. The main reason is the several allegations made against them by environmentalist and health experts. These allegations are: Destruction Of Rain Forests McDonalds sells beef. Many beef suppliers get their beef from Central and South American countries. These cattle farms are usually placed on rainforest land that had been cut and cleared. The poor soil of the rainforest can only sustain life (grain for the cattle to fed upon) for up to a decade (although the mean is 2 years). The beef suppliers must move their farms every few years and consequently destroy more rainforest. Rarely does the forest re-grow, even if replanted. 70% of the moisture that makes a rainforest a "rain" forest originates from the transpiration of the leaves on the vegetation. Once that vegetation is removed for a few years and...
McDonalds provide high quality products, such as burgers, fries, drinks, muffins, etc, which are safe and reliable that it does what it is supposed to do, but not only does the quality of the products matter, the good value for money affects the business. E.g. buy one extra value meal and get one free with a food voucher that represents the offer only. They ensure that a high standard of the product is carried out at all times and they try to compete very competitively with other fast food businesses with their good value for money. Also a customer would know if the product is good value for money by checking in another food outlet like KFC for their services and products.