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What’s on the menu today? Product differentiation analysis

19 Dec

Let’s talk about product differentiation for McDonald’s, Quick and KFC to show how theses brands make themselves more attractive to existing and new customers.

Competing and defending market share within the fast food market has always been a challenging task and operating within the current environment is even more demanding.

It is difficult to come up with new products, new tastes, and new kind of burgers, which are truly distinctive in the eye of the customer and deliver worthwhile benefits. Moreover, in the fast food industry, the competition is aggressive and McDonald’s, KFC and Quick very often “copy” each other.

We can notice a high level of product differentiation for the three brands.

The Fast Food industry is a monopolistic competition, composed of a relatively large number of sellers and an easy entry and exit in the industry. In fact, the consumer perceives that there are non-price differences among competitor’s products. That is why ideas and innovation are one of the main priorities of these companies.

Brands innovate everywhere they can possibly do: menus sizes, tastes, Bio, Menus for children and so on … Brands also adaptate their product strategy to the cultural and consumption habits of the country.

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Interbrand Last classment of Best global brands 2011

6 Dec

Brand Value Interbrand’s definition is « the marginal revenue which results from « the brand attachment » of the consumer, which would accept to pay little bit more for this brand regarding to a comparative offer. It is also a financial value that we can attribute to a brand, which explain its role into the intangibles assets of a company».

The Brand Value is calculated by Interbrand according to the actualization rate of the brand of several financial exercises. This calculation helps Interbrand to measure marketing strategies efficiency, communication expenditures, investments and other important decisions.

Top ten brands :

McDonalds is ranked at the 6th position in the global classment with more than $m35,5

Evolution of the top brands in the restauration chain industry since 2001:

Within the restauration chain brands, the first one is McDonalds which have known a great growth than 2001 (+10k $m), then there is KFC (quite the same amount than 2001). In the last position, there is Burger King which never exceed 5k $m.

Source : http://www.interbrand.com/en/best-global-brands/Best-Global-Brands-2011.aspx

Interesting Fact!

20 Nov

The danger to the French haute cuisine is clear: about 3,000 restaurants close each year in France, while McDonald’s opens between 70 and 80 outlets…

Interesting Fact!

18 Nov

At least 50% of the current consumers of American fast food in France are less than 30 years old.

“The McDonald’s Effect”

18 Nov

There were three main issues attributed to the fast food industry:

–   Poor retention of personnel

–   High level of waste that this type of business entailed

–   Heavy cost to replace items like dishes or silverware.

The McDonald’s brothers (Maurice & Richard) came up with a new strategy: their famous assembly line method of preparing burgers that would revolutionize the fast food industry. Needless to say that this was a huge success, so much that Ray Kroc bought McDonald’s in 1961, for $2.7 million. It would also not be long before other famous names in the fast food industry would start to emerge (Burger King, Kentucky Fried Chicken, Wendy’s…).

This is the “American” story, but a question still remains: how did the fast food industry make its way into the French way of life?

Short Fast Food History

18 Nov

Most of us would consider the official beginning of fast food with the birth of McDonald’s and the franchise model; the reality is that Thomas Jefferson brought the French recipe for “pommes frites” to the U.S. for the first time as early as 1802! However, French fries did not become well known in the U.S. until the 1920s.

Another fast food favorite example would be the hamburger; it’s a traditional Russian food that was brought to Hamburg by German sailors visiting Baltic ports, in the 1600s. These sailors came to the U.S. in the 18th century, settled in Cincinnati, and continued the consumption of this delicacy.

Fast food, as we know it today, is the result of an evolutionary process in our eating habits: with the end of World War II, and the massive entrance of women into the workforce that followed, there was a need for more efficiency in food preparation. As a result, restaurants evolved into diners, cafeterias, and early drive through or drive-in restaurants. The “modern” fast food restaurant became the next step toward more efficient food consumption.

Fast food was partially born because of a need to “eat on the run”, fulfilling a vital need (eating) while at the same time tending to the needs of society (working).

A New Definition of Fast Food ?

9 Nov