PART 1: TERMS OF SUMMARY

Today there are a lot of fast food chains all over the country that competed with
each other. Everyone has their own marketing strategy and everyone encounters
problem in operating their business. One of the top fast food chains in the country is
McDonalds.
McDonalds or usually called McDo has
been one of the top fast food chains in the
Philippines. Millions of people eat at McDonalds
every day. This fast food chain has many
competitors especially when it comes to the
choice of fast food for the children. McDonalds
was one of the top choices of Filipino children.
The first McDonalds was opened by
George T. Yang in Morayta university districts in
Manila during 1981. In 1981, McDonalds was the First Golden Arches in the Philippines
and in 2005, McDonalds Philippines became a 100% Filipino-owned company. Today
there are more than 400 branches of McDonalds nationwide and still counting. With
Kenneth S. Yang now as the President and Chief Executive officer, McDonalds is now a
multi-billion peso company that continues to grow serving Filipinos all over the country.
Our group decided to conduct a case study about McDonalds. As a student, it
already became a part of our routine to eat at McDonalds. A week will not pass without
us eating at McDonalds and we usually eat at the Mendiola branch beside the Centro
Escolar University. Based on those times we eat at McDonalds we have observed a lot
of things, about the crew, the food, the services and the operations. The McDonalds that
we have chosen is usually full of customers because it is near four schools: San Beda
College, La Consolacion College, College of the Holy Spirit and Centro Escolar
University. There are times that the service of the McDonalds crew is not really well
because there are times that they cant focus because they have many customers.
Regarding their food, we couldnt see much problems except in times that there are
some complains on how they cook the food. Regarding the environment and place of

the fast food, the setting of the place is convenient especially to group of students which
consists a number of students in a group but there are times that it gets inconvenient
because the place gets overcrowded. There are a lot of observations that every
customer in McDonalds would get and with that each customer, everyone has their own
opinion. As a student, as a customer of McDonalds we have observed that those things
that we usually observe is not the main problem of the company but it is when it comes
to choices of food and nutrition. Almost all of their foods are made of chicken and those
chickens are fried. Without us knowing, those foods are unhealthy because well be able
to get to much cholesterol which is bad for our health but customers dont think about
this because for them McDonalds was really good. It has foods which will really satisfy
you with a very affordable price.

PART 2: METHODOLOGY/PROCEDURE
Companys Market Situation

It is a well known fact McDonalds was considered to be one of the most

successful fast food company worldwide. From its heart felting commercials, to its
promotions and combo meals, it attracted different customers despite of not being an
original

Filipino

fast

food.

Competitors

around

McDonalds

branch

were

not a hindrance to

gain

their

customers

and

loyalty.

heart

McDonalds
has

Philippines
been

operating

in

an incredibly competitive market for over 25 years. Domestic competition from the
leading local fast-food provider Jollibee and common international rival KFC have
created an environment in which McDonalds must move swiftly and efficiently in order
to gain market share and increase profitability. In order to expand effectively,
McDonalds needs to better understand where there are market gaps that can be filled.
Additionally, McDonalds needs to have the most up to date data to determine if current
stores are cannibalizing each others trade area. To achieve this McDonalds
management will need detailed, segmented demographic data of the Philippines
overlaid with both theirs and competitors restaurant locations.
In Mendiola branch along La Consolacions corner, the reaserchers have applied
the observation method to observe the everyday market trend of McDonalds and have
come up with different factors being considered in McDonalds market situation. These
are: (1) Customer definition (2) Customer market group and segments (3) Companys
market growth and trend.

(1) Customer Definition:

(2) Customer's Market segments

More often McDonalds customers market group is compose of peers eating together,
students who enjoyed lunch together and families with their children.
Researchers have observed the strategy on McDonalds and how they market
their product with the different types of clients that they have.
Observation #1: employees are giving coupons of combo meals to student.
Observation #2: chicken bucket meals for party size and for families
Observation #3: different desserts and beverages being offered

Analysis: McDonalds are considering the income of their customers. As per students,
since these groups of people are not yet working, they have arrived at different combo
meals that can get students attention. For party size and fun size, their prices are
cheaper compared to a restaurant. They have also considered their clients who are
called the stressed-eaters which can be also categorize as students and workers by
offering different ice cream flavors and desserts as well as the drinkers type of
customers who loves different kind of beverages like coffee, floats, and soft drinks.

Life cycle: McDonalds has targeted children, youth singles and the young
urban families. It is attracting the young urban families wanting to spend some
quality time while their children have fun at the outlet.

Age: Mostly youngsters and kids are target, so to attract children McDonalds
has Happy Meal with which toys ranging from hot wheels to various Walt Disney
characters are given. Sometimes it also provides special facilities like Play
Placewhere children can play arcade games, air hockey, etc. Mostly target is
under age 5-6, 12-15, 15-20 and over.

Gender: McDonalds have segmented its services to males as well as females.

Occupation: McDonalds has mostly segmented its market to the school and
college going students.

(3) Growth market trend

McDonald's is one of the world's top fast-food companies by sales,
having more than 32,500 restaurants serving burgers and fries in
117 different countries. This chain is well-known for its Big Macs,
Quarter Pounders and Chicken McNuggets. About 70% of the
McDonald's restaurants are run by franchisees or affiliates. New
York times Square report
PART 3: SUMMARY OF FINDINGS

Current Market Situation (Macro & Micro)

Macro-environment Situation
For us to know the Macro-environment Situation of McDonalds there is a
PESTLE (Political, Economic, Social, Technological, Legal, Environmental) analysis that
is commonly used to give an overview of the different macro-environmental factors that
the company has to take into consideration. This analysis helps the consumers or
readers first, to understand the market direction if it grows or declines. Second,
business position and last, direction for operations.
Political factors
As any business enterprise, these McDonald's is under influence of a policy,
regulated by the government and the company should follow policy and instructions in
their operations. We all know that the goods offered by McDonalds are unhealthy since
it is a fast-food restaurant. They have specified that harmful elements as cholesterol
and negative influences as fatness are concerning consumption of products of fast food.
Some citizens ask the government to act regarding the concerning medical values of
meal of fast food.
Economic factors
Companies in the fast food industry aren't excused from any disputes and
problems. Definitely, they really have the separate problems involving business factors.
McDonalds has the tendency to experience difficulty especially when the economy is
experiencing inflation and exchange rates. Especially, their problem depends on the
answer of consumers to these main principles and how it could influence their general
sales. In an estimation of operations of the company, food chains as McDonalds tend to
import the biggest part of the raw materials to certain territory if there is a delivery lack.
Exchange rate fluctuations will also play an essential role in companys operations.
Socio-Cultural factors

Population, lifestyle trends, consumer attitudes and opinions, leisure time and
health consciousness have the main influence. The branch of McDonalds in the
Mendiola, has small space and it doesnt suit the population. Since it is placed at the
center of four or five schools, different lifestyles, attitudes and opinions will be the very
problem of McDonalds. It is very hard for a company to understand different
prospective.
Technological factors
McDonalds makes a demand for their products. It is through TV or internet
advertising.

McDonalds is having difficulties in terms of getting the interest of the

younger population more. Such marketing strategy is obvious in advertising like the
toys in the meal offered. Other advertising operations employ popular celebrities to
promote their products. But technology integration into operations of McDonalds tends
to increase cost of their products.
Legal factors
The main concern here is the consumer rights and the healthy and safety law.
Making existing and potential customers knowledgeable about products/services,
consumer awareness creates more informed buying decisions. McDonalds would offer
consumers the option to upgrade their already unhealthy meals to a even larger potion
known as super size. This ignored consumer rights because the establishment did not
warn customers that they would be consuming nearly half of there daily calories just by
having fries.
Environmental factor
The firm wants to make its agricultural practices more environment-friendly. McDonald's
leans on 4 key points: the reduction of greenhouse gases emissions, conservation of
water resources, and preservation of the biodiversity and improvement of animals wellbeing. These practices are able to reduce the environmental impact of agriculture and
breeding.
MICO-ENVIRONMENT

Company
McDonalds or usually called McDo has been one of the top fast food chains in
the Philippines. was opened by George T. Yang. McDonalds is now a multi-billion peso
company that continues to grow serving Filipinos all over the country.
MARKET
The recovery of McDonalds after the global crises seems to be surprisingly fast
and the sales growth rate continues to increase. The one of the biggest fast food
restaurant in the world declared that it is still gaining market shares its rivals. The high
rate of unemployment does not influence the convincing people to spend money and
eat at McDonalds. It has suggested improved breakfast menu with the new frappe
drinks. It was the key success factor in recovering after the huge losses.
McDonalds surprised everyone when it reported growth of 6.0%worldwide while
the same store sales growth was approximately 3.8%. The company is forecasting the
further growth of 5-6% worldwide. The first McDonald's in the Philippines opened in
1981 in Morayta. Today, there are about 325 McDonald's branches all over the country.

Competitors
There are a lot of fast food restaurants in the Philippines like KFC, Wendys,
Burger King and more but the best competitor of McDonalds is Jollibee. All companies
worked hard to compete with each other from advertising to stores to service. In the
food industry products or goods produced are similar. And their goals is to get the
consumer loyalty brand.

SWOT ANALYSIS
Strengths

The global presence of McDonalds having branches in 119 countries helped

them to build a huge brand name in the food industry.

McDonalds has the largest fast food market share in the world.

Use of innovative products to attract consumers like the toys they offer when you

buy happy meals.

Efficient systematization of its operation line that helps them to satisfy customers

demands..
McDonalds has low cost food yet the consumers can still have the satisfaction.
McDonalds way of advertising there products is relevant to its consumers real

life thats why many are being persuaded by there advertisements..

Partnerships with best brands like Coco Cola and Heinz Ketchup Company is an

additional factor of having tasty food.

Strategic locations because they usually put McDonalds branches in school area
and office area because its their usual customers..

Weaknesses

Quality issues among the franchise networks. Some Mcdonalds branches cannot
attain the quality of food products that is supposed to be pull out to the

customers.
Unhealthy food image because of too much fat that Mcdonalds product has.
High employee turnover rate
Environmental issue like the use of HCFC 22 to make polystyrene that is

contributing to ozone depletion.

Lack of food varieties because Mcdonalds products are more on chicken food.

Opportunities

Be environment friendly. Use products that do not harm our environment.

Go for healthier food like offer some green salads, healthy dessert or use

products that do not contain too much fat.

Create a wider food variety so that everyone can enjoy McDonalds products.

Threats

Continuous growth of fast food restaurants in the Philippines

Health related issues
Environment related issues.
Due to the economic recession some people chooses to cook than to eat in

restaurants to save money.

Increase in cost of raw materials that can affect their low cost pricing.

COMPETITOR ANALYSIS

4Ps
Jollibee

Backgroun
d

Product

Price

Place

KFC

Jollibee is a Filipino
multinational chain
of
fast
food
restaurant, founded
by Tony Tan. It has
2,510
stores
worldwide

KFC
is
based
in
Louisville, Kentucky. KFC
has more than 11,000
restaurants worldwide. It
started operating in the
Philippines in 1967.

Jollibee offers a
wide variety of food.
They offer different
combo meals of
fried chicken, they
offer different sulit
meals of beef and
shanghai
and
desserts like ice
cream and other
side dishes.
Jollibee
offer
different kinds of
combo meals. Their
rice meals starts
with Php39 up to
Php150.

KFCs specialty is their

friend chicken served in
different forms, it can be
spicy, buttered and the
original one. They also
offer
burgers
and
desserts like salads, ice
cream and other side
dishes. They also offer
combo
meals
and
family/Bucket meals.
KFC has an average
priced meals. They Also
offer different kinds of
combo meals.

Jollibee is usually
located in areas,
which
are
surrounded by many
outgoers. They offer
home deliveries and
Drive thru.

KFC is usually located in

office and school areas,
they also has branches in
almost every Malls in the
Philippines. They offer
home delivery.

Mang Inasal
Edgar
Sia
II
founded
MangInasal in the
year
2003.
MangInasal
has
already expanded
to 464 branches
nationwide.
Mang
Inasal
is
known
in
their
grilled foods. They
also offer sizzling
foods and desserts
like leche flan and
halo-halo.
Mang
Inasal will not leave
you hungry with
their Unlimited rice
offer.
MangInasal offers
Paborito
Meals,
Sulit Meals and
Merienda
Meals
which ranges from
Php49
up
to
Php120.
Mang
Inasal
is
usually located in
urban areas. They
offer
home
deliveries.

Promotion

Jollibee
use
celebrities
to
endorse their brand
in TV and online
advertisements.
They
also
offer
advantage card that
earns points.

KFC offer various forms

of incentives when
buying bucket meals.
They also use TV
Advertisements and
online advertisements.

MangInasal
use
celebrities
to
endorse their brand
in
TV
advertisements and
online
advertisements.

Recommendations and Conclusions:

Major Issue: (1) Food of McDonalds is considered as junk food and unhealthy
(2) Limited space for students of McDonalds Mendiola branch
Recommendations:
1. McDonalds is big food supplying
company, and all of us know, how
food affects our health. It is one of
the main factors, what built our
body and strength our brains.
Maximizing
organic

the

food

status

of

the

its

best

by

at

developing a new product which

consists of organic food would be
a great new market segmentation
for McDonalds:
Solution 1: Offer new menus under consists of organic food and organic product
Solution 2: Partnership with food nutritionist and food technologist for
consultation of food ingredients.
Solution 3: Survey consumers what particular healthy ingredients and menus
they would like McDonalds to have.
Program Collateral:

Step 1: Brainstorming of what food and ingredients can be a substitute to come

up with a healthy menu. Example:

Dessert and Beverages: Low-Fat Milk and dairy products

Fat free Chocolate Milk/ Low fat white milk than soft drinks:

Yogurt Ice cream instead of common vanilla Ice cream:

Usage of Vegetables
Produce salad options :

Natural potatoes for fries

Protein
Patty wheat bread :

Chicken wrap up with vegetables as subtitute for McChicken sandwhich

Step 2: After brainstorming will be the consultation of the food to the food
Nutritionist and food technologist for the approval of the said menu.

Step3:
Survey of people in social networking sites like Facebook and their own website
to know which type of menu does the consumers would prefer. Through this
action, the customers of McDo will be aware McDos new market segmentation
about offering something new in their market.
It would gain the attention of their customers plus they would know if these
nutrition foods will be accepted by their consumers and will be saleable just like
their normal menus.

2.

Expansion, cleanliness and better and more improve service:

Every customer is always aiming for a better service. As what observed in
Mendiola McDonalds there are things that are needed to be improve around the
four corners of Mcdo. These are:

Expansion of Mcdonalds space is highly recommended. Since it is

surrounded by 5 different schools, space in the said branch tends to be so
narrow since a lot of customers are coming in. Small space of McDonalds
is probably one of the causes also of the hot temperature around the
campus.

Better security around Mcdonalds. It is observed that around Mendiola

are street children coming and go inside the Mcdonalds and ask for left
overfoods and moneys. It is not bad to help, helping is indeed an option.
But at times children who were coming and go are doing it at disrespectful
manner that can lessen customers food interest.

Additional staff and employees. Since the Mendiola branch is a busy one,
students tend to come and go that could probably leave the place untidy
as what the researchers has been observed. Additional employees that

would automatically clean up the tables and serve the food waited by the
others would result to better performance
Conclusions:
McDonald's is one of the largest fast food companies in the world. They continue
their path for success by keeping their consumers in mind regarding their product
selection as well as their prices. They encourage their employees to do a good job,
usually promotes from within, and offers several scholarships to encourage education.
Though McDonald's is a centralized, "wait and see" company they find ways to use
technological products that will increase their productivity, service, and sales,
everywhere. McDonald's will certainly be around for plenty more years to come.
McDonalds has a very big part to us especially teenagers and youngsters (9os
kids) despite that it is not our own. We believe that it will continue to grow and grow
more and