Description
The ppt on McDonald's Arch Deluxe burger. The product was not a success and is considered to be an expensive failure. It was launched in 1996 in the US. The PPT analyses the product, its marketing and failure.
? In 1995 McDonald's was the largest restaurant chain in the US
with domestic sales of $15.9 bn
? Country's fourth-largest advertiser, spending $490 mn on media
? Big Mac, Egg McMuffin, Quarter
Pounder, Happy Meals
? Friendliness, cleanliness, consistency
and convenience
? Child-friendly approach, Ronald, bright
and colorful interior, fun center, toys, food and the playground
? Domestic Sales in 1993 increasing at 4% annual rate ? Sales slumped to 3% decrease by third quarter of 1996, fifth quarter in a row ? In part, decline attributed to baby-boomers drifting away ? Threat from competitors like King, Wendy’s, and Subway and falling market share.
? Business strategy to keep their major
markets and expanding into emerging markets
? An attempt to offer more choice and to
win a new customer segment : a more sophisticated adult.
? Introduced in May 1996 as the flagship of the adult ?
?
? ?
line of burgers $200 million dollar marketing campaign Ads showed kids making “yucky faces,” turning up their noses at the new adult burger. Ronald engaged in “adult” activities like golf and pool Launched in 12,500 McDonald's restaurants in the U.S. and Canada Consumer acceptance survey: consumers in focus groups loved it, and 80% said they’d buy it
? Arch Deluxe line of bacon, beef,
?
? ? ? ? ? ? ? ?
fish, and chicken burgers. Arch Deluxe Secret Sauce (mayonnaise and peppercorn mustard) 1 sesame seed hamburger bun (potato roll style with split crown) 14 pound Topp's beef patty 1 slice American cheese 1-2 tomato slices 1-2 lettuce leaves, chopped 1 tablespoon ketchup 1 tablespoon chopped white onion McDonald's hamburger seasoning
? Arch Deluxe for $2.99 and an Arch Deluxe with Bacon for $3.29. ? Price of an average Arch Deluxe kept at 32 cents higher than a Big
Mac - $1.90
? McDonalds basic hamburger priced at 85 cents. ? Burger King's 99-cent Whopper.
? Conflict of image – high quality, premium v/s cheap and
convenient
? Product Quality Leadership - Simplicity not sophistication
? Two basic arguments
o Priced too low v/s Big Mac o Priced too high v/s regular burgers
? People are pre-decided about choice of burger ? Too many variations ? Sold on taste – people go for the brand ? Alienation of one demographics hurt
? Customization not possible
? Play down the mistake in Sept 1996 - “the Arch Deluxe was
never intended to be a silver bullet.”
? Mid August 1997 McDonald’s acknowledged the out of sync
pricing
? Product pricing and not taste
? Dropped to $1.00 and coupons
offered
? Tomato McGrand by McDonald’s Japan a decade later in 2003 ? McFeast Delux in Australia in Nov 2009
? Royal Deluxe in France
? Reference pricing plays a role in convenience snacks ? Go for what you know ? Avoid customer confusion ? Be skeptical of research
doc_375444112.pptx
The ppt on McDonald's Arch Deluxe burger. The product was not a success and is considered to be an expensive failure. It was launched in 1996 in the US. The PPT analyses the product, its marketing and failure.
? In 1995 McDonald's was the largest restaurant chain in the US
with domestic sales of $15.9 bn
? Country's fourth-largest advertiser, spending $490 mn on media
? Big Mac, Egg McMuffin, Quarter
Pounder, Happy Meals
? Friendliness, cleanliness, consistency
and convenience
? Child-friendly approach, Ronald, bright
and colorful interior, fun center, toys, food and the playground
? Domestic Sales in 1993 increasing at 4% annual rate ? Sales slumped to 3% decrease by third quarter of 1996, fifth quarter in a row ? In part, decline attributed to baby-boomers drifting away ? Threat from competitors like King, Wendy’s, and Subway and falling market share.
? Business strategy to keep their major
markets and expanding into emerging markets
? An attempt to offer more choice and to
win a new customer segment : a more sophisticated adult.
? Introduced in May 1996 as the flagship of the adult ?
?
? ?
line of burgers $200 million dollar marketing campaign Ads showed kids making “yucky faces,” turning up their noses at the new adult burger. Ronald engaged in “adult” activities like golf and pool Launched in 12,500 McDonald's restaurants in the U.S. and Canada Consumer acceptance survey: consumers in focus groups loved it, and 80% said they’d buy it
? Arch Deluxe line of bacon, beef,
?
? ? ? ? ? ? ? ?
fish, and chicken burgers. Arch Deluxe Secret Sauce (mayonnaise and peppercorn mustard) 1 sesame seed hamburger bun (potato roll style with split crown) 14 pound Topp's beef patty 1 slice American cheese 1-2 tomato slices 1-2 lettuce leaves, chopped 1 tablespoon ketchup 1 tablespoon chopped white onion McDonald's hamburger seasoning
? Arch Deluxe for $2.99 and an Arch Deluxe with Bacon for $3.29. ? Price of an average Arch Deluxe kept at 32 cents higher than a Big
Mac - $1.90
? McDonalds basic hamburger priced at 85 cents. ? Burger King's 99-cent Whopper.
? Conflict of image – high quality, premium v/s cheap and
convenient
? Product Quality Leadership - Simplicity not sophistication
? Two basic arguments
o Priced too low v/s Big Mac o Priced too high v/s regular burgers
? People are pre-decided about choice of burger ? Too many variations ? Sold on taste – people go for the brand ? Alienation of one demographics hurt
? Customization not possible
? Play down the mistake in Sept 1996 - “the Arch Deluxe was
never intended to be a silver bullet.”
? Mid August 1997 McDonald’s acknowledged the out of sync
pricing
? Product pricing and not taste
? Dropped to $1.00 and coupons
offered
? Tomato McGrand by McDonald’s Japan a decade later in 2003 ? McFeast Delux in Australia in Nov 2009
? Royal Deluxe in France
? Reference pricing plays a role in convenience snacks ? Go for what you know ? Avoid customer confusion ? Be skeptical of research
doc_375444112.pptx