McDonald's: A Customer-Focused "Plan to Win" Strategy

     Ray Croc, a 52 year old salesman of milkshake-mixing machines, set out on a mission to transform the way Americans eat. in 1955, Kroc discovered a string of seven restaurant owned by Richard and Maurice McDonald. He saw the McDonals brothers' fast-food concept as a perfect fit for america's increasingly on-the-go, time-squeze, family-oriented lyfestyle. Kroc bought the small chain for $2.7 million, and the rest is history.
    From the start, Kroc preached a motto of QSCV- quality,service,cleanliness, and value. These goals became maintays in McDonald's corporate and marketing strategy. By applying these values, McDonald's grew quickly to become the world lagest fast-feeder. The fast-food giant now serves more than 68 million customers each day through more than 33000 restaurant in 118 countries, racking up system-wide sales of more than $85 billion annually.
    In the mid-1990s however, McDonald's fortunes began to tun. The company appeared to fall out of touch with customers. American were looking for fresher, better-tasting food and more contemporary atmospheres.
    To fix the problem, the company tried new product, everything from pizza to toasted deli sandwich (both failed). It continued opening thousand of new restaurant each year, but the new operation suffered from the same malaise as already existing ones.
     In early 2003, McDonald's announced a new strategic blueprint- what now calls its "Plan to Win". At the heart of this strategic plan, was a new mission statement that refocused the company on its customers. No longer satisfied with being " the world best quick-service restaurant,"  McDonalds changed its mission to "being our customers' favorite place and way to eat". In line with the new mission, the company built its Plan to Win around five basics of an exceptinal customer experience: people, products, place, price and promotion.
     Under the Plan to Win, McDonald's got back to the basic business of taking care of customers. The goal was to get "better, not just bigger". The company halted rapid expansion and instead poured money back into improving the food, the service, the atmosphere and marketing at existing outlets. To make customer experienced more convenient, McDonalds store now open earlier to extends breakfast hours and stay open longer to serve late-night dinner- more than one-thired of McDonald's restaurants are now open 24 hours.
    Fast-food giant McDonald's knows the importance of good strategic and marketing planing. Thanks to its new Customer-focused strategic blueprints-called the Plan to Win-customers and the company alike once again humming the chain's catchy jingle, "i'm lovin' it".

Chapter 2

Review Chapter 2

Company and Marketing Strategy

Company-Wide Strategic Planing: Defining Marketing's Role

    Strategic Planning is process of developing and maintaining a strategic fit between the organization's goal and capibilities and its changing marketing opportunities.The focus of strategic planning is to find to game plan for the long-run survival and growth that makes the most sense given its specific situation, opportunities, objectives, and resources.

    Steps in Strategic Planning:

1. Defining Market-Oriented Mission
       An Organization exist to accomplish something, and this purpose should be clearly stated. Forging a sound mission begins with the following  question: What is our business? Who is the costumer? These simple questions are among of the most difficult the company will ever have to answer. Succesful companies continuously raise these question and answer them carefully and completely.
       Many organizations develop formal mission statements that answer these questions. Mission statement is a statement of the organization's purpose- what it want to accomplish in the larger environtment. A clear mission statements acts as an "invisible hand" that guides people in the organization.
2. Setting Company Objectives and Goals
        The company needs to turn its mission into detailed supporting objectives for each level of management. Each manager should have objectives and be responsible for reaching them.
3. Designing the Business Portofolio
        Guide by the company's mission statement and objectives, management now must plan its business portofolio. Business Portofolio is the collection of business and products that make up company. The best business portofolio is the one that best fits the company's streghts and weakness to opportunities in the environtment.
        Business portofolio planning involves two steps. First, the company must analyze its current business portofolio and determine which business should recieve more, less, or no investment. Second, it must shape the future portofolio by developing strategies for growth and downizing.
4. Planning Marketing and Other Functional Strategies
        The relationship of marketing to the other business function is often misunderstood.
   - Marketing alone can not produce superior value for the consumer. All company departments must work together to accomplish this.
   - Each department is a link the value chain ( a major tool for identifying ways to create value for the costumer)
   - A company's value chain is onl as strog as the weakest link.
   - Marketers are challenged to find ways to get all departments to "think costumer".
   in its search for competitive advantage, the firm needs to look beyond its own value chain and into the value chains of its supplier, distributors, and ultimately costumers. This "partnering" will produce a value delivery network.
   
   

Customer-Driven Marketing Strategy

Market Segmentation

     The market consist of may types of cotumers, products, and needs. The marketer must determine which segments offer the best opportunities. Consumers can be grouped and served in various ways based on geographic, demographic, psychographic, and behavioral factor. The process of deviding a market into distinct groups of buyers who have different needs, characteristics, or behaviors, and who might require separate products or marketing program, is called market segmentation.
 

Market Targeting
     After company has defined its market segment, it can enter one or many of these segments. Market targeting involves evaluating each market segment's attractiveness and selecting one or more segment to enter. A company should target segments in which it can profitability generate the greatest costumer value and sustain it over time.

Market Potitioning
     Market potitioning is arranging for a product to occupy a clear, destinctive, and desirable place relative to competing products in the minds of target consumers.

Market Differentiation

     Marketing differentiation is an actual differentiating the market offering to create superior customer value.