• Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

Firms within the fast food industry fall under the market structure of competition.

Extracts from this document...

Introduction

Babette Reppuhn Microeconomics 130 Professor Paul Briggs May 2, 2004 A Competitive Fast Food Firm Firms within the fast food industry fall under the market structure of competition. Market structure is a classification for the key traits of a market. The characteristics of a market that is competitive would include: a large number of buyers and sellers, easy entry to and exit from the market, homogeneous products, and the firm is a price taker. Take McDonalds fast food restaurant for example. In 1954, Ray Kroc became the first franchisee appointed by Mac and Dic McDonald in San Bernadino, California. He opened his first restaurant in De Plaines, Illinois (near Chicago), and the McDonald's Corporation was created. By 1959, the 100th McDonald's had opened in Chicago. In the early years of the 1960's, Ray Kroc had bought all rights to the McDonald's concept from the McDonald's brothers for $2.7 million. In 1963, the 500th restaurant had opened. By the end of the decade, McDonald's was listed on the New York stock exchange, had opened restaurants in every state of the union and also outside the USA. ...read more.

Middle

To maintain an advantage on the competition, Llyod says that McDonald's provide quality food with fast, friendly, and efficient service to their customers, making them want to return. "We offer our customers a wide variety of menu items that are different from our competitors. Most other fast food places they mainly sell just burgers and fries. We offer from salads to yogurt parfaits. And our newest menu item, the chocolate dipped cone, is one item our competitors definitely do not sell. Our customers have a choice of different things on our menu other than burgers, unlike our competitors who offer just simple burgers with different condiments on them and giving them different names." When asked if Burger King or any of the top competitors were to change their prices or their menu items, Llyod said, "I would have to change my prices too. Take for instance Wendy's Fast Food Restaurant; they introduced the $.99 value menu. After that happened, all the other fast food places offered "value" menu items as well, including McDonald's." Llyod said that his customers love it. ...read more.

Conclusion

If customers feel as if they get a good meal, at a good price, then they are satisfied. Customer satisfaction is McDonald's number one motto; therefore, since they offer value menus with good customer service, most customers would be satisfied. Customer satisfaction coupled with relatively low prices keeps McDonald's profitable. Another quality of competitive market structure that may be overlooked, but is vital to the fast food industry is the ease of entry into the market. Start-up franchises within this market structure can begin operating with relatively low initial investments (compared to other industries). This is not the case where monopoly companies, such as Microsoft is concerned. There are numerous barriers to entry into a Monopolistic market structure, capital being one of the most prominent barriers. If a new franchise offered the consumer a quality product at a reduced price, then the chance of success are greatly increased. McDonald's established a name for themselves by offering quality food and fast, friendly service. This is a very important concept in the fast food industry. Once they established themselves to the consumers and became more visible, they created more demand, which lead to a greater revenue for them. . Reppuhn 1 ...read more.

The above preview is unformatted text

This student written piece of work is one of many that can be found in our GCSE Marketing and Markets section.

Found what you're looking for?

  • Start learning 29% faster today
  • 150,000+ documents available
  • Just £6.99 a month

Not the one? Search for your essay title...
  • Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

See related essaysSee related essays

Related GCSE Marketing and Markets essays

  1. Marketing - buyers

    Variables in the behavioral segment include: Benefits: Benefits segmentation is a type of behavioral segmentation wherein the marketers group the market according to what people look for in a certain product. It often identifies and concentrates on what benefits that most people are interested in and using that as a way to get to the customers.

  2. Promotional campaign for Pizza Pan foods in Malaysia

    For instance, if we plan on selling and introducing fast food products, it is essential for us to know how often potential consumers purchase the product and their price sensitivity in order to gain profitability in sales. This will eventually give our company a 'niche' that we could capitalize on,

  1. Plannng and research. I would like to open a African restaurant, food from all ...

    approximately 30 percent to the kitchen and prep area and the remainder to storage and office space. Dining area This is where I'll be making the bulk of your money, so I don't cut corners when designing your dining room.

  2. Discuss the concept of marketing within the context of the public/government sector

    . Lauterborn (1990) proposed that there were twelve dimensions of marketing, however, McCarthy reduced the model so that it became known as the 4Ps: Product, Place, Price and Promotion. Marketing Mix Figure 1: Marketing Mix Product means the totality of 'goods and services' that the company offers the target market.

  1. Cadbury Limited.

    * When framing questions. -I must consider the language used in the questionnaire, (simple and specific). No jargon, slang or local terms, as some people may not understand them. -I must ask only one thing in a single question. -Make sure questions aren't ambiguous. -Don't ask people to recall events that happened long ago.

  2. Prepare a market strategy for Lucky Restaurant.

    The plan for the Lucky's marketing strategy must include: * Assessment of the current situation of sales and marketing strategy. Including a managerial questionnaire * A survey of the public to ascertain their point of view on the current marketing strategy of Lucky * Various method of marketing will be investigated.

  1. Setting up an African restaurant on the Quayside in Newcastle.

    However in emerging cities like Newcastle there is a gap in the market and the chances of the business surviving are likely to be higher. Although there are many restaurants in Newcastle which will be competing with mine there are very few African restaurants and none located in the town centre.

  2. Explain how development in the consumers market have impacted on food retailing

    A precise example of that would be higher consumers cost. Consumers nowadays have to spend more to be able to obtain high quality food or goods. Some consumers are willing to pay high price in order to get the quality.

  • Over 160,000 pieces
    of student written work
  • Annotated by
    experienced teachers
  • Ideas and feedback to
    improve your own work