Around 2000, Burger King began offering vegetarian meat selection on their menu in US. Taking the design and look of whopper junior, the sandwich uses a morningstar farms soy based meatless patty instead.
Burger King has been the second largest burger chain in North America behind McDonald’s. Burger King’s revenues and market share have declined in the early 2000s and projections now have it falling to third place behind Wendy’s in hamburger market share in United States in the near future. Burger King has been closing under performing stores and changing its marketing strategy in order to turn its fortunes around.
The objective of promotion is to increase sales and profits but promotional activities might be designed to achieve particular tactical objectives. Burger King and McDonald engage in promotional activities to communicate with customers. They use promotion as series of techniques for informing, influencing and persuading customers. They do their promotion by using the following:
Television Advertising: which is a non-personal, one-way communication to promote the sale of goods or services through paid for advertisements in the media. McDonald advertise to boost its sales and to keep its customers aware of new and existing products. The restaurant uses catch phrases like “am loving it” to advertise its products. McDonald uses artist like Destiny Child to promote its advertisement and this has been a successful method because McDonald’s sales has increased. McDonalds also uses other methods such as giving toys to children with every happy meals and also putting coupons in national newspapers. Burger King also gives toys to children with every kid’s meals and uses catch phrases like “you’re the boss”. This has also been a successful method for Burger King because their sale has increased. McDonalds uses the slogan “I’m loving it” to make children feel that the foods taste very good while Burger King uses the slogan “you’re the boss” to make children feel that they are in control of what they want and it’ll only be served the way they want it.
Branding: is the name or design, which McDonald and Burger King use to identifies a product and distinguishes it from the products of rival firms. McDonald and Burger King use their brand name on all their product packages including fries boxes, burger boxes, tissues, carrier bags, paper bags and cups. Branding build up McDonald and Burger King’s customer loyalty and also provide the product with identity.
Packaging: which is a way of promoting by means of design and display. The intention is to create an impact at the point of sale. Packaging plays a key role in promotion both in the product and the organization. McDonald and Burger King will seek to develop a favorable image for the brand and to make it distinctive from the rival’s brands. McDonalds and Burger King puts their name on all their packages, these includes Fries boxes, Burger boxes, Tissues, carrier bags, paper bags and cups they use to serve their customers.
Sales promotion: which covers range of activities such as competitions, gifts, point-of-sale displays, leaflets and sponsorship. McDonalds uses sales promotion offers such as buy one get one free while Burger King uses coupons to offer buy one get one free and a meal with free desert. This as developed customer’s loyalty and penetrate into new market segments.
McDonald and Burger King uses different ways of reaching different audiences, with technology opening up new forms of advertising such as Internet. They do advertising through the following:
Printed materials: these make up by far the largest group of media in the UK and include all newspapers and magazines both national and local as well as the trade press, periodicals and professional journals. Newspapers and magazines is a less expensive method for McDonald’s to use to advertise its products and it can be used to target specific group of people whether kids, teenagers or adults. The cost will be based on the size of the advertisement. McDonalds sometimes put coupons in newspapers like metro, which is a free newspaper to the public and magazines in order to attract more customers to purchase from them. Using newspaper and magazine to advertise is less expensive, McDonald and Burger King can use this method to target specific groups like teenagers because most Teenagers do not buy newspaper which is why I agree that McDonald using metro newspaper is a successful method on the other hand female teenagers do buy magazines so Burger King should also consider using newspaper like metro to give customers free access to vouchers. The cost of newspaper and magazine advertisement basically depends on the size required.
Radio: McDonald advertised its breakfast meals and other offers on radio. With the new technology consumers now have access to radio on their mobile phone. Majority of teenagers now listen to radio on their mobile phones everyday, which means McDonald, or Burger King using radio to advertise will be a successful method by targeting the teenager group.
Outdoor media: this include fixed posters, hoardings, advertising on buses, taxis, underground trains and other forms of transport provide opportunities for advertisers to generate specific messages. McDonalds have posters at almost all the underground trains station stating the nearest location of McDonald and I think this is a successful method because some customers might be new to the area and putting the description outside the train station will make it easy for the customers to locate.
Merchandising/Point of Sales: McDonald and Burger King have the same merchandising/point of sales techniques because both store using window display, displaying products that are most demanded or products on promotion.
Public Relations: McDonalds used to have good public relations until 2005 when the company received public complaints that the company’s food is causing obesity in the United State. Because of this complaint, the company had to introduce some healthy meals by introducing salads and fruits. Ever since then the company have been using sales promotion and advertising to have control of the content and presentation of their message. The company tries to forward message that they value and listen to their customers’ needs and requirements and prepared to change their menu in order to gain customers loyalty, whereas Burger King is yet to receive any public complaints about its products and keep to providing good customer services and reduce queues.
Part 2
Situation Analysis
In 1999, sales of fast food increased by 6.2% and the market was worth around £7 billion. Expansions by leading brands have continued to be the main market drive even though a lot of the new outlets are smaller. Around 75% of adults visited fast food for takeaway but only 47% of them eat in. Sandwiches have the largest share of fast food and the market share for sandwiches have been increasing in the last years. Burger have the second largest share of fast food and the others include pizzas, chicken, fish and chips. There are five companies that dominate the fast food restaurant, these are: McDonalds, Burger King, KFC, Pizza Hut and Subway. I will carry out questionnaires to find out more information about existing market for sandwiches.
- Gender
Female
Male
- Age
16-20
21-30
31-40
40 and over
- Occupation
Student
Professional
Other
- Marital status
Single
Married
Others
- What is your favourite fast food?
Kebab
Pizza
Fish & chips
Chinese
Others
- Which fast food restaurant do you visit?
KFC
McDonald
Pizza Hut
Others
- Are you satisfied with your favourite fast food?
Yes
No
- What else do you purchase with your fast food?
Fizzy drinks
Tea
Coffee
- What time do you visit the fast food?
Between 12:00 and 12:30
Between 13:00 and 13:30
Between 14:00 and 14:30
Between 15:00 and 15:30
Between 16:00 and 16:00
16:00 and above
- How often do you visit the restaurant?
Everyday
Twice a week
Once a week
None
- Do you prefer
Eat in or
Take away
- Do you prefer
Food previously advertised
None advertised
- What kind of advertisement do you prefer?
Television
Radio
Newspaper
Others
- Are you
Vegetarian or
Non-vegetarian
- How far is the nearest fast food restaurant to your work place?
Under 10 minutes
Up to 10 minutes
Between 10 minutes and 20 minutes
- Would you prefer a fast food restaurant near your work place?
Yes
No
Maybe
Here are the results of my questionnaire.
Looking at the above result, a lot of people spend money on sandwiches which means selling sandwiches would be profitable because sandwiches is the fastest growing sector in fast food market. Sandwiches are showing signs of positive growth with sales and market dominance rapidly over the years. The high demand is due to people demanding lighter lunches and snacks. Sandwiches are known to be the most popular choice of food for consumers while the second popular is burgers which a lot of people also like. Burger sales have increased in the past years leading people to demanding more. The other core sectors in fast food industry are pizzas, chicken, fish and chips and the top five leading stores that dominates these market are McDonald, Burger King, KFC, Pizza hut and Wimpy. After conducting the questionnaire, I now believe that it is definitely worth investing money in the sandwich market. It is also definite that selling sandwiches to the market will be some how profitable as it was revealed in the secondary research that sandwiches is the fastest growing sector in the fast food market, which means this product have a lot of potential as it is going through rapid growth.
Category 5 Hard Pressed represents the poorest area of UK and also has low employment. Only few people have qualifications and people working are more likely to be employed in low unskilled occupations. Family incomes are also very low. There is also a very large amount of single adult per household this includes singles, lone parents and pensioners.
Group Q Inner City Adversity is densely populated urban area with young multi ethnic population in and around London. Households are young singles, young families and single parents. The household includes families that live in small flats in purpose built estates, which are normally rented, from the council or housing association. The level of unemployment is almost double of the national average and the working population are employed in routine and manual occupations. There is also a significant student population in the area. Family incomes are very low with a lot of people earning less than £10,000 per year.
Type 55 Multi-ethnic purpose built estates consists of people that normally rent small one or two bedroom flats from the council or housing association and there is a high level of over crowding. About 60% of the households are single including single pensioners. There are also average levels of children but over half of them live in single parent households. A lot of people have been looking for work for some times which is why unemployment levels have been very high. Employment seems to be in low skilled occupation, which makes the income very low.
Demographic segmentation
Age: this is another significant segment of the market. The table above shows that 25-29 years old are the people that dominate the Kings cross area. They mainly consist of low skilled workers with relatively low level of income.
Income, which is the most, defined demographic of customer base. From the table above you will see that average income levels are very low because of this, pricing would be low in order to match the low level income. In terms of pricing, people earning high income will be able to afford higher prices for better quality sandwiches.
O
Occupation is a demographic segment that corresponds with high-income group. The majority of employees within Kings cross area falls under other workers with 123% employees in the services. The second most popular is in the retail services while the third popular is in manufacturing, mining and construction workers.
SWOT Analysis
SWOT analysis is a tool used by an organisation to help the firm to establish its Strengths, Weaknesses, Opportunities and Threats. SWOT analysis is used as a framework to help the firm to develop its overall corporate, marketing strategy or product strategy. It is an analysis of the effectiveness of the organisation’s operation and both internal and external factors which influence its success. Strengths and Weaknesses are internal factors, which are controlled by the organisation while Opportunities and Threats are external factors, which are uncontrollable, by the organisation. SWOT stand for Strengths Weaknesses Opportunities and Threats. It is a useful framework to assess a company’s strengths weaknesses opportunities and threats.
Strengths: location of a business is the main strength and because the business will be located at King’s Cross, it is definite that the business will attract a lot of customers, there are also a wide range of business in the area such as schools, colleges, hospitals, libraries and so on. There is also easy access to transportation including buses, underground station and Thameslink. King’s cross is one of the busiest area in London with over 65,000 people every week days.
Weakness: low market share, no brand loyalty, lack of experience, weak brand name, poor or damaged reputation among customers, location of business and poor quality of goods or services can cause weakness in a business. McDonalds weakness is that sandwiches are not the main products of the company whereas competitor like subway only specialise in sandwiches.
Opportunities: growing market, increased of consumer spending, selling internationally and changes in society beneficial to the business, mergers, joint ventures or strategic alliances, developing market such as internet, moving into new market segments that offer improved profits and market vacated by an effective competitor can cause opportunities for McDonalds. McDonalds have the opportunity to progress into new market segments that offer improved profits.
Threats: large and increasing competition, price wars with competitors, new innovative product or service, superior access to channels of distribution, government policy e.g. taxation introduced on product or service, changes in society not beneficial to the business, increased trade barriers, new regulations, rising cost of wages, possible relocation costs due to poor location, local authority refusing plans for future building expansion, increasing interest rates which means borrowing repayments will increase and existing product become unfashionable or unpopular. McDonald’s biggest threat is Subway because they have a reputation for offering high quality and healthy food. Subway’s main product is sandwich and this is where most of their sales come from.
Promotional mix
I am going to use the following types of promotion to promote my goods, these include: newspapers, direct mail, sales promotion and merchandising.
Newspapers: the reason I chose newspaper is because it is cheap and will be distributed locally. Local and regional newspapers attract a lot of readers despite the competition from national newspapers.
Direct mail: is convenient for the respondent in terms of having promotional material delivered to doorstep. My direct mail will come in form of leaflets, which will be distributed locally. Using this method guarantee that consumers will definitely receive the leaflets so they will be aware of the products and promotion. Leaflet is also a cheap method of promotion. Distributing leaflets is a very cost effective method but a lot of it tends to be destroyed and ending up in the bin, which means wastage levels, will be high but the way people also respond seems to be high. Distributing leaflets will cost time and labour.
Sales promotion: will come in form of special offers and vouchers printed in newspapers and leaflets. Special offers will be for a limited period only in order to encourage sales. Sales promotion can lead to price war depending on reaction of competitors. Customers can become dependence once used to sales promotion and once products returns to its normal price, customers will no longer see it as value for money.
Merchandising: good merchandising at point of sale can turn customers’ desire into prompt action when they go inside the restaurant and they can also notice the displays and posters and this will encourage them to make purchase.
