Costa Coffee
Costa coffee was first poured in Britain’s streets in 1971 at 9 Newport Street, London, by Sergio and Bruno Costa. They have over 893 branches throughout the UK. They have a total of 1300 branches in 35 countries and having opened 300 such outlets worldwide (of which 50 per cent are in Britain) in the past 12 months. Their biggest complex is located in Dubai and can seat up to 320 people. In the next few years Costa Coffee has announced they are looking to open another 200 stores by 2012. Costa Coffees annual revenue came to around £1.05 billion, but with them taking on the task of only selling fair trade coffee, about 9% of the profit went to the workers who supply the coffee beans. So the profit intake came to around £625 million. Even with the profit no where near as high as McDonalds they still attract a certain type of customer especially the business people who buy tea and coffee on the way to work.
Wimpy
The Wimpy brand first came around in the 1950s and the name was inspired by the character of J. Wellington Wimpy from the Popeye cartoons which were very popular at the time. This was thought out by a man called J. Lyons and his co-workers who owned 12 restaurants at the time just when fast food became so popular with McDonalds and KFC making their mark. Wimpy currently have over 180 restaurants across the UK and over 468 worldwide, with a work force of over 4,000 employees. In the last year the annual revenue reached around £625 million and they made a healthy profit of around £200 million. Most of the profit was reinvested in all the stores across the world to give them a new futuristic style.
The competition that these brands have brought to McDonalds has made them a better company than ever. With these companies bringing McDonalds competition they have bought many different and appealing aspects to the fast food market to try and gain an edge over them. With the competition high with all the brands, each franchise has achieved different goals to make themselves better as a company; such as McDonalds has involved themselves in many charity events organised by themselves, along with KFC and Costa Coffee. Competition makes each brand try harder and harder to be the best they possibly can be, they try to make different aspects of their own products and service qualities better than their competitors. Ways in which McDonalds do this include:
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Price – they lower the price of their products which are cheaper or at a similar price to the other competitors (pound saver menu).
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Promotion – they try to promote the brand and products as best as they can to bring in more customers and to maximize revenue, such as TV adverts and sponsors such as Olympics and football.
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Customer service – each brand wants to make their customer service as good as possible to ensure that the customers have a good meal and would like to come back in the future. To do this they need the motivation of the employees to be high so they serve everyone with a smile and be polite. In particular McDonalds give the employees certain bonuses like extra money and free health care.
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Facilities – in each branch the brands want the customers to be comfortable and have an enjoyable time. The restaurants need to be clean and keep a high standard of comfort to ensure the satisfaction of the customers.
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Extra facilities – McDonalds offer certain extra facilities to the customers to attract them to the store; one of the extras they use is a Wi-Fi facility to mainly target students and working business people, also they have recently put in place the opening of 24 hour stores worldwide.
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Offers – the companies bring out different offers to compete with whatever the other brands bring out, such as McDonalds bought out the pound saver menu were most items on the list were below a pound. Burger King soon after brought out a super saver menu which was very similar but targeting the bigger meals and reducing the price by a pound.
McDonalds owns over 45% of the whole market shares for 2009. This is a huge difference in size in comparison to businesses. They own nearly twice as much as the next biggest competitor.
McDonalds does not really react too many of the other companies because the other companies are the ones that are reacting to McDonalds. Although recently KFC brought out a new style of product called the ‘Chicken Fajita Rap’. Around 5 weeks after the production of this McDonalds brought out an alternative to the US menu which was cheaper and came in a snack size (which did not sell very well in the U.S) and the full size which was cheaper than KFC’s version. Costa Coffee started bringing in more customers during the morning offering freshly ground coffee. McDonalds first introduced fresh coffee into their restaurants in the UK, but that did not seem to be enough as Costa Coffee were still bringing large amounts of customers in who were buying fresh coffee. So they could not beat them with the same product at a cheaper price, so they brought in a new aspect which would target the early morning business people. Wi-Fi seemed to be the answer for McDonalds which offered the customers everything they needed and more. With this new facility they were bringing in more customers during lunch time and after work times. Also along with bringing in more working class people because of the Wi-Fi, another target market where also interested in the idea, the students who wanted a place to eat and do their work at the same time. This made it a very convenient prospect for them. McDonalds have always been known for their great customer service, no other competitor can really compare with the measure that they take to maintain this excellent standard. McDonalds offer all sorts of benefits to the employees to keep the moral and motivation high among them all, such as:
- Company cars
- 28 days paid holiday per annum
- Free private health care
- Stakeholder pension scheme
- Free meals
- Money off public transport
- Money off gym memberships
- Incentive pay
- Double overtime pay
With all these benefits given to the employees it makes them want to come in and work and carry out the job as well as they possibly can. This then reflects down on the customer’s views of the brand and makes them want to come back to the restaurant time and time again, which then creates more profit for the company. McDonalds having excellent customer service is one of the main aspects for them reaching their aims, ‘to be the first choice when eating out’, and the above supports them in reaching this aim.
McDonalds is one of the most recognised brands in the world and has exceeded its own standards with the excellent customer service, value for money, great food and the clean and comfortable environment is sustains in its restaurants. After looking at this brand for my coursework I can clearly the see the measures they have gone to as a company to get where they are today. The changes and investments they have made are impeccable and have made a huge impact on the people they hold custom to everyday. Looking through a site on the internet I have found many reviews with over 95% giving McDonalds positive feedback.
Evidence 1: Internet Review –
Evidence 2: news article
McDonald's U.S. Sales Sizzle, Up 4.3%
June 10, 2009
- Eric Newman
McDonald's announced today that its domestic sales grew 4.3% at comp stores in May. The leading restaurant chain attributed the growth to the success of its breakfast menu, as well as recent menu launches like the Southern Chicken biscuit and sandwich.
The company also said its "everyday affordability" message helped drive customers to McDonald's restaurants.
"We're committed to providing our customers with compelling value, unique menu variety and unparalleled convenience," said CEO Jim Skinner, in a statement. "Our steadfast focus on the customer experience . . . continues to deliver positive results worldwide."
Still, McDonald's is experiencing healthy growth, said Ron Paul, president of food industry research firm Technomic, Chicago. At an estimated $29 billion in annual sales, McDonald's is more than three times that of No. 2 Burger King, Paul said.
"They're becoming their own hardest example to follow. Let's give them credit for a good month in light of what's going on in the industry," said Paul. "Their innovativeness with the menu and putting the marketing muscle behind it is part of their formula that's really working for them.
Evidence 3: 2008 highlights
Looking at the facts and reviews of these three items of evidence it clearly shows how well the brand McDonalds is doing. Each piece of evidence here has been copied and pasted straight from the site it was written. The first piece was from a teenager who had grown up with McDonalds all through her life and loved it. This shows how well McDonalds can target families, children and teenagers. Now looking at the next piece of evidence it shows how well McDonalds have kept the sales rates up, also to show how much they have increased. Again the last piece of evidence shows how well they have increased their global comparable sales, total revenue and the amount of cash returned to the shareholders. All these different points show us that they are the best fast food organisation in the world, with the good aspects of McDonalds that I included earlier I my task such as the staff benefits, customer service and prices will all help them reach their main aim ‘to be the first choice when eating out’.
