Analysis of Quick Service Restaurants Industry

The assignment provides an in-depth analysis of the quick service restaurants industry, covering topics such as market size, growth rate, customer demographics, and purchasing habits. It also explores the impact of factors like social media marketing, discount pricing strategies, and consumer demand for vegan options on the industry's performance. The document draws from various sources, including research papers, industry reports, and statistical data, to present a well-rounded understanding of the quick service restaurants industry.

A report on strategic marketing of Mc Donald’s in US market to
Please refer to whatever it’s written in red or in the box comment on the right, do not lose
your time arranging the text, because I will do it after and please do not delete the
comments as my teacher need to see them here at my next feedback. Thank you so much
Executive summary
Strategic marketing is all about carrying out an assessment about needs and requirements of
consumers in respect to what is important for them and why a particular product or service is
purchased.
The present study is about strategic marketing of Mc Donald’s in US market where it wishes to
introduce Mc veggie burger in the nation. Hence a PESTLE analysis of US fast food market has
been carried out so as to assess the set of macro environmental factors that may affect its
operations in US market. This is followed by carrying out SWOT analysis of Mc veggie burger
so as to assess the overall chances of success and likely issues if the burger is introduced in US
market. Various mode of market entry has also been discussed and right choice has been
suggested. It is also very essential to segment and target the market so as to meet the needs and
requirements of consumers. Then comes 7ps theory where emphasis has been given on factors

related to product, price, place, promotion, physical evidence, people and process. Porter’s
generic strategy has further been applied on the company so that it gains competitive advantage
in the nation.
The study reveals that the company should bring in Mc veggie burger in US market on account
of its high demand and great taste reviews amongst the vegetarian consumers. But it is also true
that the product may face competition from other brands selling veg burgers in USA and its non-
veg burgers. The company is thus required to target vegetarians who have tried the product in
India or elsewhere and crave for it. The need is to focus on reasonable pricing and promoting it
as a healthier alternative to meat.

Table of Contents
Introduction......................................................................................................................................4
SWOT analysis of Mc Veggie burger.............................................................................................4
PESTLE analysis of US fast food market........................................................................................5
Describe the modes of market entry for Mc Donald’s in USA and recommend the most
appropriate strategy.........................................................................................................................6
Identify segmentation and target population in terms of statistics and also add the 7 p’s theory for
Mc veggie burger.............................................................................................................................7
7 p’s theory for Mc veggie burger in USA......................................................................................8
Insert diagram of Porter’s competitive advantage and explain cost differentiation, cost leadership
and focus strategy............................................................................................................................9
Recommendations..........................................................................................................................12
Conclusion.....................................................................................................................................12
References......................................................................................................................................13

Introduction
Strategic marketing refers to the process of assessing the needs and requirements of consumers in
terms of what is important for him or her and why a particular product or service is purchased by
them. The concept further allows the firms to render a solution to the demands of consumers in
the best possible manner (Sinha and Sheth, 2017). The overall goal of strategic marketing is to
enhance the position of one company over the rival firm which is done by answering three
questions namely when, where and how the company should compete. The present study has
made an attempt to study the strategic marketing in terms of making an entry of Mc veggie
burger of Mc Donald’s in USA. Focus will be given on carrying out PESTLE analysis of fast
food market of USA followed by SWOT of Mc veggie burger. This will be followed by carrying
out market segmentation and targeting for the product as well as deciding on the best suitable
Porter’s generic strategy and approach to market entry.
Task 1
Selection of a Product and a country
In this report Mc Veggie burger is been selected to launch in USA. To see the successful
implication various tools are used to identify the needs at both internally and externally. Product
strength and weakness are looked at to identify the potential market in different parts of USA to
attract number of customers. The report also covers external factors for Mc Donald’s how they
can launch their new Mc Veggie Burger in USA and have considered number of factors using
PESTLE analysis.
Seeing the launch of Mc Veggie burger in USA some strength and weaknesses are considered as
follows. As per the strength, Mc Veggie burger has a huge popularity among Indians living in
US and it is also known for great taste and flavor. The company as well as the product have a
Strong brand name and is reasonably priced in other nations. The consumers have a preference
for the burger as it makes them feel light and satisfied. In the area of weakness, the company
may get fewer consumers due to fierce competition. Moreover, it has an image of an item to be
consumed only by the vegetarians. The burger is not too healthy for consumption in spite of
being a vegetarian option. Hence, the firm should try to introduce it in Mc Donald’s outlets
within US and bring few more variants in the nation. The burger can be made closer to the taste

of meat burger. The burger however may face threats from other fast food chains selling veg
burgers as well as Non-veg burger variants offered by Mc Donald’s.
Strength
Huge popularity among Indians living in US
Known for great taste and flavor
Strong brand name (Lillqvist and Louhiala-
Salminen, 2014).
Reasonably priced in other nations
Weakness
Customer loss due to fierce competition
Has an image of an item to be consumed only by
the vegetarians.
Opportunity
Introduction in Mc Donald’s outlets within US
Bringing of a few more variants in the nation
The burger can be made closer to the taste of meat
burger.
Threats
Other fast food chains selling veg burgers.
Non-veg burger variants offered by Mc Donald’s.
PESTLE analysis of US fast food market:
In order to introduce Mc veggie burger within the US market it is essential to carry out PESTLE
analysis of US fast food market so as to assess whether the product will succeed in the market or
not.
In political please add about taxation, VAT, import/export and legislations (very important)
 Political – The operations of any company and its product offering is dependent on
governmental policies of the nation. In this regard, fast food market of US is influenced
by several policies launched by government in the health area. To be in tune with the
governmental policies, Mc Donald’s is required to provide training to the staff members
in the area of food safety, hygiene and overall quality before they start working on
preparation of Mc veggie burger. Other than this, they are further required to make the
staff members aware about the concept of cleanliness. The company is also required to
adhere with import regulations which involves for inspection by FDA. Then there is also
a presence of employment restrictions such as regulations related to working hours. Here,
Mc Donald’s will be required to ensure that staff members do not work for more than the

stipulated hours and even if they do then compensation should be paid to them. The fast
food market is also required to pay minimal wage to the workers which have been found
to very low in US (Fast Food Industry Analysis 2018 - Cost & Trends, 2018). Many of
the nations have imposed taxes on fast food and US may soon follow the trend. As Mc
veggie burger comes in fast food category hence this can act as a source of disadvantage
for the company.
A comparison between Mc Donald’s and Burger King
Revenue in US market
Mc Donald’s $2.6 million
Burger King $1.2 million
Revenue
Mc Donald’s Burger King
As per the above chart, Mc Donald’s is far ahead of burger king in terms of revenue. Still,
Burger King earns only half than what is done by Mc Donald’s.
 In economic, teacher wants me to write a bit more and to find a diagram showing a
comparison between McDonald’s and Burger King, on which of them people is spending
more money?
 Economic – Due to increase in pricing structure of restaurants, diners have cut down
their visits so that the saving can be spent on other things. However, on a positive note

they prefer to spend more on fast food chains like Mc Donald’s and Burger King rather
than higher-priced restaurants (Fickenscher, 2017). Hence introduction of Mc veggie
burger by Mc Donald’s will be a good option for the company.

Figure 1 Dining frequency in fast food restaurants
(Source: How often do you dine out at quick service restaurants, 2016)
 Social – From the above chart, it has been found that within the US market there is a
presence of 17 percent consumers who dine out in quick-service restaurants per month
while 20 percent give a visit at least once a week (How often do you dine out at quick
service restaurants, 2016). There is also a huge popularity of Mc Donald’s in US as it is
regarded as the largest quick-service restaurant of the nation in terms of value and the
demand. The introduction of Mc veggie burger is also at very huge demand. (Revenue of
quick service restaurants in the U.S. 2002-2020, 2018).

 In social I need a diagram of comparison too. Draw a diagram with the percentage used
above, 17 percent and 20 percent
 Technology - US market is driven by advanced technology hence the need on part of Mc
Donald’s is to utilize the same in its everyday operations. Focus is to be given on using
technology in promotion through social media, inventory management system, customer
relationship management (CRM), supply chain etc. Technology is further required to be

adhered in payment system, quick delivery to consumers among others (Kavoura, Sakas
and Tomaras, 2017). Free Wi-Fi facility can also be given to consumers who pay a visit
to Mc Donald’s stores. This can be followed by usage of phone charging mats to increase
the stay of consumers within the store. Consumer interaction can also be done through
social media platforms followed by posting pictures on internet so as to ensure towards
overall advertising and brand management (Harrington and et.al., 2017). Furthermore the
usage of deep fat fryers as well as high powered ovens can aid in producing multiple
products at a faster rate which reduces the overall time spending, thereby leading to more
consumer serving on a daily basis.
 Environmental – the government of US requires the fast food chains to work on the
issue of food waste by carrying out donation activities. They are further required to bring
a reduction in their overall carbon foot print followed by reducing the use of plastics in its
overall packaging of Mc veggie burger (Sinha and Sheth, 2017). The company can
adhere with the concept of go green so as to maintain its image of a firm who adheres
with environmental sustainability practices. There can be an increased focus on usage of
biodegradable packaging by the company in US so as to bring an overall reduction in
waste.
 Legal – On a legal front, the fast food firms all over US are required to provide calories
and nutritional information on its website. The same strategy should be followed by Mc
Donald’s in its Mc veggie burger as well. As of now the company has faced a lot of
criticism as its menu lacks healthy options (Tuten and Solomon, 2017). Hence Mc veggie
burger should be made as healthy as possible. The company is further adhering with areas
such as maintaining food hygiene in the kitchen. It thus advises its staff members to wear
gloves and cap while working. Cleanliness is maintained by keeping the slab clean
(About us, 2018).
As per the above Pestle analysis it is quite clear that the forces are in favor of Mc Donald’s to
launch its Mc veggie burger in UK. This is on account of stable political conditions, hue demand
of consumers for the burger, shift in vegetarian lifestyle technology driven process among others.
You need to make your recommendation for McDonalds to launch the Veggie
burger here too, after you run your Pestle analysis.

Describe the modes of market entry for Mc Donald’s in USA and recommend the most
appropriate strategy
In order to expand the scope of businesses, firms implement various channels through which
they can introduce their product in new countries. In order to do that, they adopt certain channels
which are considered as the modes of market entry into international markets. In this context,
there are many alternatives for Mc Donald’s to make an entry into USA and some of them have
been discussed below. Also, an appropriate mode is also recommended at the end (Palmatier and
et.al., 2016).
Strategic alliance - If Mc Donald’s adopts this mode of entry then it will have to strategically
bond with another small food chain in the USA market and create a separate entity with the small
company. Through this, Mc Donald’s will be able to understand the American market and needs
of customers easily with the help of resources already owned by the other firm. (Ododo,
Mulholland and Turner, 2015). This will save set up cost and time for Mc Donald’s. Strategic
alliance can be done with smaller firms who are selling food items such as burgers etc in US.
The best firm will be the one who is specialized in selling vegetarian burgers. This is as the
company will be in a better position to let the management at Mc Donald’s know about the taste
and preference of consumers.
Please write more on strategic alliance
Joint venture - In this situation, two or more independent companies join together to attain a
stronger position into the market. The joint venture firms can have control over the company by
dividing their assets, revenues and expenses. For this, Mc Donald’s can create a joint venture
with a local food chain firm in the USA market with the help of which it can easily explore the
local market and understand the taste of customers. Joint venture can also reduce political and
economical market entry risk for Mc Donald’s as well as help in gaining a brand image in short
time (Voigt, Buliga and Michl, 2017). The company will have to create a joint venture with that
firm that shares almost similar objectives and values which will help in providing superior
service to the customers.
Franchise - Another mode of entry is franchise wherein Mc Donald’s can allow another firm in
USA to make use of its name, trademark, label, and products by charging a royalty fees from it.

This reduces various risks of entering into a new country for the company (Lillqvist and
Louhiala-Salminen, 2014).
It can be recommend to Mc Donald’s in US market that the best suitable mode of entry is of
franchise as the company will get a royalty fee and only sell its brand name and label. This will
bring a reduction in various kinds of risks associated to the set up in a new country followed by
bringing a reduction in market failure. The company can also lay emphasis on increasing market
share and brand value.
Recommend which one is the best one for McDonald ( franchise)?
Identify segmentation and target population in terms of statistics and also add the 7 p’s theory
for Mc veggie burger
Here the teacher wants a diagram of targeted areas Boulder, Ann Arbor, Austin, Seattle (areas
that you identified further down) showing which one of them is our priority.
Segmentation can be defined as dividing large as well as and heterogeneous markets in smaller
segments. The technique is quite beneficial for Mc veggie burger of Mc Donald’s as it will aid in
serving the consumers in best possible manner and also led to fulfilment of their overall needs
(Kotler and Armstrong, 2016). In present scenario, there is no need of using any market
segmentation strategy for Mc veggie burger in USA as it is a universal product and will be eaten
by all types of consumers irrespective of age, traditions, beliefs, income group among others.
Targeting on the other hand is selecting a group of potential consumer who can be served the
product offering of the company. The target population for Mc veggie burger in US will be
vegetarians who have tried the product in India/elsewhere and crave for it. (Fast Food Industry
Analysis 2018 - Cost & Trends, 2018). Statistics further reveal that 12 percent of Americans in
US who are under the age of 50 prefer a vegetarian diet which can be targeted by Mc Donald’s
for its Mc Veggie option in the US (Vegan Market - Statistics and Facts, 2018). Activist as well
as health and wellness author Kathy Freston has further said that she has collected around 80000
signatures when she called for a petition for urging McDonald’s to bring vegetarian burger in the
US (Jargon, 2014).

Figure 2 Targeted areas by Mc Donald’s
(Source: Shen, 2011)
A study has further revealed a list of ten Most Vegetarian Cities In USA where Boulder, Ann
Arbor, Austin, Seattle are a few of them that have a presence of at least 34 percent consumers
who like to order vegetarian dishes while dinning out (Lillqvist and Louhiala-Salminen, 2014).
The major one will be Austin where there is presence of around 100,000 people of Indian origin
(Shen, 2011). Two to three outlets will be opened by Mc Donald’s in this region that offers Mc
veggie burger. Rest of the cities will have one outlet.

7p’s theory for Mc veggie burger in USA
Product Lack of any non-vegetarian ingredients such as meat and fish
Is full of vegetables like soya bean, beans, mushrooms, grains and seeds
Consists of eggless variant of mayonnaise
The taste should be made quite close to meat burger so that it is consumed by non-
vegetarian consumers as well.
Price Reasonably priced which is similar to other burger variants introduced by Mc
Donald’s. Other than this, price skimming strategy can also be adopted by Mc
Donald’s where the company can charge high price on account of its competitive
advantage over other burger variants. The price can then be lowered seeing to
increased supply (Lee and Vachon, 2016).
Place The product should be available mainly in those places that have high
concentration of Indians especially Guajarati’s who consume vegetarian food. If
the demand increases then the product can be started in all the other stores present
in US.
Promotio
n
The best form of promotion for Mc veggie in US will be through word of mouth
publicity. This technique is enough to bring the consumers towards it (Župič and
Giudici, 2016). Other than this, advertisements can also be released on TV with a
caption saying Mc veggie burger now in US.
It can be promoted as a healthy alternative to meat (Sinha and Sheth, 2017).
Physical
evidence
The overall ambience of Mc Donald’s should be made fun, loving as well as
comfortable so that consumers enjoy paying a visit.
People Chefs and cooks are required to be trained properly for making of Mc veggie
burger. Most importantly they are required to be trained for not adding any non-
vegetarian ingredient in the burger which also includes mayonnaise containing egg.
Process There can be a usage of separate cutlery for the production of Mc veggie burger. It
can also keep the making of mc veggie burger a transperant one by allowing the
consumers to have a look at the entire process including the set of ingredients that
are being used in the making of vegetarian burger.

Insert diagram of Porter’s competitive advantage and explain cost differentiation, cost
leadership and focus strategy
Figure 3 Porter’s competitive advantage
(Source: Lee and Vachon, 2016)
Cost leadership - Mc Donald’s has been adhering with cost leadership strategy in the fast food
segment all over the world. The same concept can be applied by the company for Mc veggie
burger within US as well as to bring an increase in overall sales of product. This should be kept
lower to that of the rival firms like Burger King and other vendors in order to garner an increased
market share for the product. This can be done by keeping the store working as an efficient one
and lowering the operational cost that is incurred by fast food chain within US on an everyday
basis. The company can further offer Mc veggie in happy meal or combo offers.

Differentiation - Mc Donald’s always try to differntiate its products from the competitors by
making use of varied approaches. It provides free Wi-Fi facility which allows the consumers to
enjoy the meal even when they are working. It has also brought a diffeerentiation in its
marketing strategy by targeting families and majorly kids by providing them a happy meal with a
toy in it. The company can further ensure to keep its market research in the production of Mc
veggie burger a strong one (Sinha and Sheth, 2017). This can be done by carrying out a thorough
study about the needs and behavior of consumers with respect to the consumers so that the best
product can be offered to them. It can further incorporate certain sauces or ingredients in it that
appeal to the masses.
Focus ( Here we need to focus more on Cost leadership and differentiation)- This strategy is
usually applied by those companies who wish to focus on a small or niche market by focusing on
the overall needs and requirements of consumers. Mc Donald’s in this regard will have to make a
selection of niche market in USA through the identification of needs and requirements of
consumers (Lillqvist and Louhiala-Salminen, 2014). Along with this, there can also be a
development of low cost strategy to attract those consumers who are in the niche market. Cost
leadership can be maintained by the company through bringing an overall control in operational
cost. This can be done via reducing the staff, focusing less on seating arrangements among
others. While differentiation can be met by introducing Mc veggie burger whose taste should not
match with the ones offered by others. Strong loyalty can also be built up amongst the consumers
that will be served by the company.
Recommendations
It is being recommended to the company that it should bring Mc veggie burger in US market and
also introduce some more variants of it to grab more consumers. It can be recommended that Mc
Donald’s should adopt franchise as the mode of entry into the USA market as the company will
get a royalty fee and only sell its brand name and label. This will also reduces various kinds of
risks associated to the set up in a new country. This also reduces the risk of market failure and
company can focus on increasing market share and brand value. This will also help in gaining
customer value in new country which will further help in expanding the business. It is also
recommended that the company should focus on both cost leadership and differentiation strategy

within the US market. This can be easily achievable because both strategies were tried and tested
in other markets and had resulted in creation of a good consumer base for the company.
Conclusion
From the above report a conclusion can be drawn that Mc veggie burger can be introduced by
Mc Donald’s in US market. This is on account of its high demand and good taste amongst the
vegetarian consumers. However the company can face competition from other brands who are
selling similar kinds of vegetarian burgers in USA. The competition may also be tough from its
own burgers that are quite popular among non-veg consumers. But still the fast food market has
enough room to accommodate the product in USA as there is an ongoing trend of vegetarianism
amongst the consumers. The company is thus required to target vegetarians who have tried the
product in India or elsewhere and they have a demand for it in USA too. Reasonable pricing can
be kept for the product followed by promoting it as a healthier alternative to meat. The company
already has franchising within US which should be maintained followed by adhering with low
cost and differentiation strategy.
Thank you for your hard work
Kind regards

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