McDonald's New Product Launch Strategy

The assignment analyzes the launch strategy of McDonald's new product, Mc.GoVeg. It covers various stages such as pre-launch, initial testing, external testing, event timing, goal setting, and post-launch activities. The pricing strategy used by McDonald's is also discussed in detail. The document concludes that the idea of the new product is interesting and can be a huge success if planning and action are successful.

Running head: NEW PRODUCT DEVEOPMENT
NEW PRODUCT DEVEOPMENT
Name of the Student
Name of the University
Author Note

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Executive Summary
The given report throws light on the new product development practice of the food chain
company Mac Donald’s. The report is addressed to the CEO of the firm .The discussed product
is Mc.GoVeg which is an extension to their product line. The report follows a structured format
whereby the introduction describes the content of the paper followed by the description of the
new product. The new product development stage relating to the burger has also been discussed
along with theoretical concepts. The launch strategy of Mc.GoVeg along with the pricing
strategy highlights several important aspects of bringing the product into the market. A brief
conclusion wraps up the report.

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Table of Contents
Introduction......................................................................................................................................3
The new product- Mc.GoVeg..........................................................................................................3
New Product Development Process.................................................................................................4
Product Launch Strategy..................................................................................................................5
Pricing strategy................................................................................................................................7
Conclusion.......................................................................................................................................7
References........................................................................................................................................8

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Introduction
The business environment is extremely dynamic. For this purpose any business
enterprises keep on innovating and come out with various new processes and developments to
the existing product line in order to pace up with the environment (Armstrong et al., 2015). The
given product concentrates on the New Product Development of one such product. The chosen
product is an addition to the existing line of Mc Donald`s product. The name of the new product
introduced is Mc.GoVeg. Mc.GoVeg is directed for those customers who do not like to
consumer meat these days. The report shall highlight various points related to the new product
development process such as the new product development process, launch strategy and pricing
strategy.
The new product- Mc.GoVeg
The Mc.GoVeg is an addition to the existing product line and meals of the food chain
restaurant- McDonalds. This idea has been initiated from the fact that many people like to eat
vegetarian meals these days as they are concerned about the environment and worried about the
population of the animals (Thomas, 2013). These people tend to believe that eating meat is
unethical and often look out for healthier and vegetarian options. Many countries around the
world like China, Russia, England and many countries in the United States as well. Hence, with
the launch of these products in various countries, the company will be able to cater to the needs
of the customers who want a vegetarian burger option (McDonald's UK. ,2018).
The burger will consist of the usual ingredients like bread, cheese, sauce, vegetables, and
a filling. However, instead of meat such as pork, beef, chicken or turkey the filling will be made

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up of soya beans. Soybeans are said to have a high nutrition value which can fulfill the nutrition
value contained in meat (Ahmad, Mallick & Schroeder, 2013). This will help the customers to
have an equally nutritional meal and fulfill their desire of having a vegetarian meal.
New Product Development Process
The new product development process of the Mc.GoVeg will comprise of the following :
 Idea generation- In the given step the new idea about a product is generated. This idea
can be generated after testing the market possibilities and surveying the different needs of
the customers. The idea of Mc.GoVeg came from the feedback received from the
customers at various outlets around the globe.
 Idea Screening- Various deals are usually collected before a new idea needs to be
finalized. All ideas are considered and a basic cost- benefit analysis is then carried out in
order to decide upon one idea (Yan & Dooley, 2014).For the given product, various other
additions were considered before carrying out this product idea.
 Concept Development and Testing- In the given process, the idea is tested. For
Mc.GoVeg the various recipes were checked to get the right ingredients and the perfect
product.
 Business Analysis- The breakeven point and profitability analysis of the product to be
launched is conducted to determine the effectiveness.
 Beta Testing and Market testing- In the given step, a mock test is conducting to check the
response received. This can include making the various students try the product and
nothing their response.

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 Technical implementation- All the technical aspects of the given product are tested in the
given step.
 Commercialization- This stage witnesses the launch of the product. The Mc.GoVeg was
launched in China, England, USA and others (Davcik & Sharma, 2015).
 Measuring Performance-In this step the impact of the particular burger on the whole line
of meals offered at McDonalds is tested.
Figure 1: The new product development procedure for Mc.GoVeg. (Source : As created by the
author)

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Product Launch Strategy
A product launch requires different activities like research, planning, skills and
knowledge. The product to be designed needs to have a connection with the audience. A
customer needs to be satisfied on various quality components like price, quality and the
characteristic features (Becerra, Santaló & Silva, 2013). The components of the launch strategy
for Mc.GoVeg are given below :
1. Purpose
The first step consists of determining the purpose of the launch. Once the purpose of
the launch is decided the plan can be carried forward easily. For Mc.GoVeg the aim of the
brand is to expand its product line and cater to a larger consumer base.
2. Stages
There exist different stages of launching whereby the initial testing, external testing
positioning and event timing is decided upon. The team should consider various factors
before setting these aspects. To set the event time or the given product, the company can do it
at a time during the holidays so that they can gain maximum footfall (Hair Jr & Lukas,
2014). The goal setting stage will also determine the revenue goals for the launch event.
3. Post Launch
Even after the launch takes place, the company is required to carry out various post
launch events so as to maintain consistence. Mc Donald’s can associate various happy meal
programs with the brand so that the company is able to sell the product easily and make it
popular.

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It should be considered that if a program is not properly panned with a set timeline and
the budget as well as the sequence of events, the product might be a flop in the market (Hartley
& Claycomb, 2013). The timing of launch and manner also plays a key role in determining the
product`s success.
Pricing strategy
The pricing strategy used to be used by Mc. Donald’s for Mc.GoVeg is as follows :
 Psychological Pricing- In the given method the product will be charged in a way such
that the customer feels they are being given too much for too less (De Mooij, 2013). For
example instead of pricing the product at 3$, the burger will be priced at $4.99 in order to
make it more attractive t the customers. This is because the focus of the customer is on
the first digit of the price.
 Bundle Pricing- This is the happy meal plan where the product is priced high when
bought separately and comparatively lower when bought with different combos like a soft
drink and fries (McDonald's UK. ,2018).
Conclusion
Therefore, from the above analysis it can be stated that the idea of the new product is
very interesting and that the company should go ahead with the idea. The product life cycle has
been stated along with the various stages in the launch strategy. Lastly, the pricing strategy of the
firm is also quite realistic and simply stated the idea can be a huge success if the planning and
action are successful.

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References
Ahmad, S., Mallick, D. N., & Schroeder, R. G. (2013). New product development: impact of
project characteristics and development practices on performance. Journal of Product
Innovation Management, 30(2), 331-348.
Armstrong, G., Kotler, P., Harker, M., & Brennan, R. (2015). Marketing: an introduction.
Pearson Education.
Becerra, M., Santaló, J., & Silva, R. (2013). Being better vs. being different: Differentiation,
competition, and pricing strategies in the Spanish hotel industry. Tourism
Management, 34, 71-79.
Davcik, N. S., & Sharma, P. (2015). Impact of product differentiation, marketing investments
and brand equity on pricing strategies: A brand level investigation. European Journal of
Marketing, 49(5/6), 760-781.
De Mooij, M. (2013). Global marketing and advertising: Understanding cultural paradoxes.
Sage Publications.
Hair Jr, J. F., & Lukas, B. (2014). Marketing research (Vol. 2). McGraw-Hill Education
Australia.
Hartley, R. F., & Claycomb, C. (2013). Marketing mistakes and successes. Wiley.
McDonald's UK. (2018). Mcdonalds.com. Retrieved 13 March 2018, from
https://www.mcdonalds.com/

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Thomas, E. (2013). Supplier integration in new product development: Computer mediated
communication, knowledge exchange and buyer performance. Industrial Marketing
Management, 42(6), 890-899.
Yan, T., & Dooley, K. (2014). Buyer–supplier collaboration quality in new product development
projects. Journal of Supply Chain Management, 50(2), 59-83.