Love them or loathe them, it’s hard to deny that McDonalds has really got its act together in the UK and is thriving in a tough environment for consumer spending. This excellent article from the Independent features an interview with Jill McDonald (no relation to the original founder!) describes some of the key functional strategies that the business has adopted which are credited with improved business performance.
Lots for business students (and their teachers) to get their teeth into here. Among the key strategies adopted are:
- Redesign and renovation of location interiors, with renewed focus on families (marketing & ops)
- Wider menu choice, including some healthier options (marketing & ops)
- Free WIFI (marketing)
- High level of training, including extended apprentice programmes
- Increased proportion of locations which are franchises (up from 40% in 2006 to 65% now)
13 Dec 2011
Above the line Vs Below the line promotion
The way in which promotion is targeted is traditionally split into two types - “above the line” and “below the line”.
Above the line promotion
This is paid for communication in the independent media e.g. advertising on TV or in the newspapers. Though it can be targeted, it can also be seen by anyone outside the target audience.
The main aims of above-the-line promotion are to inform customers, raise awareness and build brand positioning. Above-the-line tends to have a higher cost since the promotional methods used are less precise.
Below the line promotion
This concerns promotional activities where the business has direct control over the target or intended audience. There are many methods of below-the-line, including sales promotions, direct marketing, personal selling and sponsorship.
Above the line promotion
This is paid for communication in the independent media e.g. advertising on TV or in the newspapers. Though it can be targeted, it can also be seen by anyone outside the target audience.
The main aims of above-the-line promotion are to inform customers, raise awareness and build brand positioning. Above-the-line tends to have a higher cost since the promotional methods used are less precise.
Below the line promotion
This concerns promotional activities where the business has direct control over the target or intended audience. There are many methods of below-the-line, including sales promotions, direct marketing, personal selling and sponsorship.
Unit 10: Lesson Plan
I want you all to investigate the coffee shop, 'Tim Hortons'.
You will need to look at the website and read the article below, then answer the questions underneath the article:
http://www.timhortons.com/ca/en/index.html
Canadian coffee titan aims to be hot in UAE
Tim Hortons is a coffee, doughnut and sandwich chain with more than 3,000 locations in its native Canada, where it commands about 80 per cent of the poured-coffee market. But with just a handful of its locations now open in the UAE, "Timmy's", as Canucks call it, faces stiff competition in the Emirates.
Paul House, the company's executive chairman, and David Clanachan, its chief operations officer for international markets, discuss their efforts to win customers.
Q: More than a dozen billboards advertise Tim Hortons on the road between Dubai and Abu Dhabi. How much money are you putting into marketing here?
A: Mr Clanachan: Our partner, the Apparel Group, they're the master licensee for the area. Our agreement was to build 120 stores [in the Gulf] over the next five years, so they are doing quite a bit of marketing.
Q: Your shop on Sheikh Zayed Road is next door to Starbucks, and competing coffee shops are near four other locations that opened in Dubai and the capital on Wednesday. How are you trying to win over their customers?
A: Mr House: It's no different than at home. We compete against Starbucks, McDonald's and various players. This space became available; it was nothing to do with being next to Starbucks. Our food offering - our menu - gives us a competitive advantage because they're really not in the food business; they're in the beverage business. We're in both.
Q: Some shareholders fear you are focusing too much on Canadian expats here. Does Timmy's resonate with UAE locals and others?
A: Mr Clanachan: There's no doubt Canadians in the marketplace are very prideful of the brand. At the end of the day there might be 25,000 to 30,000 Canadians in the region, but the reality is we have to exist and succeed with people that are local residents. If you look around the restaurant, the multiculturalism that exists in Canada exists here too. Really, it's about what do you bring to the table.
Q: The company has come under fire in Canada for contributing to waste with its paper cups. Why did it take so long to respond?
A: Mr House: I would say it was more the local communities getting the right recycling programmes. It's wonderful to talk about recycling cups, but you have to have an infrastructure for that. We have an extensive programme in Atlantic Canada, where all of our cups are being recycled, made into cup holders and come back throughout the system. We're trying to implement that in every area we can.
QL And what are you doing to address environmental considerations in the UAE?
A: Mr Clanachan: We brought over the same format for eating in-restaurants that we have in Canada, which is using china - plates, mugs, so we're not creating excess packaging inside the restaurants … we'll just have to see how we're going to handle [recycling and other aspects].
Questions to investigate -
- Conduct a PEST analysis for Hortons Coffee shop.
- What are the strengths, weaknesses, opportunities and threats of Tom Hortons.
- How would you best conduct market research to identify whether a new coffee product would work. (think about who your target market is/where would you conduct any questionnaire/or trials/what type of sampoling would you use and what are the advantages & disadvantages of this policy)
- What was the strategy by Hortons when they decidsed to come to the UAE, tactical or strategic?
- Where would you place this in the Ansoffs Matrix?
- Does Hortons have any cash cows, stars, dogs, problem children? If so, what are they and how could they extend the life cycle of any dog?
- What pricing strategies do Tim Hortons use?
- What pricing strategy should they use? (In your opinion)
- Finally, using all the elements of the marketing mix, how would you ensure Tim Hortoins is a success in Dubai?
3 Dec 2011
The Boston Matrix, whisky and booming exports
Don’t know why I keep using alcoholic beverages as examples in my lessons, but a recent discussion of the famous Boston Matrix got us all thinking which drinks belong in which Boston Box category. We decided that Guinness probably represents a cash cow for its producer, Diageo. In Europe, the market for beers is stable, or shrinking. But Guinness is a popular brand, with a large market share. It’s a good earner for the drinks giant.
But the Boston Matrix hints that there are better marketing opportunities out there: like grabbing a large share of fast growing markets – and developing star products. And that’s what Diageo have done, with whisky exports to China of popular brands like Johnnie Walker rising so fast the industry is struggling to meet demand.
According to The Guardian, in the last nine months whisky sales overseas climbed by 23% compared with last year. That is before Christmas and New Year sales are taken into account, putting the industry on course to shatter last year’s £3.4bn export record. Industry sources said this surge in popularity, built on the growth of an affluent, image-conscious middle class in emerging markets in South America and Asia, could mean that some distilleries and producers might temporarily run short of supplies, as whisky production has a lead time of 10 to years or more. The association calculated that this rate of sales meant the whisky industry was earning £125 every second for Britain’s balance of payments, making it the “stellar” export performer and the most successful of all “fast moving” products made in the UK.
The final overseas sales value of whisky, which helps support 10,300 direct jobs and 35,000 suppliers’ jobs, could be as much as £10bn. The best-selling brand is Johnnie Walker, made by Diageo, with 20% of the market.
The industry is a huge earner for Britain, but still held back by at least two legal constraints. The first issue is the normal process of the regulation and control of alcohol both here and abroad. The second is the behaviour of those countries who impose high tariffs (import taxes) to protect their own domestic drinks industries.
But the Boston Matrix hints that there are better marketing opportunities out there: like grabbing a large share of fast growing markets – and developing star products. And that’s what Diageo have done, with whisky exports to China of popular brands like Johnnie Walker rising so fast the industry is struggling to meet demand.
According to The Guardian, in the last nine months whisky sales overseas climbed by 23% compared with last year. That is before Christmas and New Year sales are taken into account, putting the industry on course to shatter last year’s £3.4bn export record. Industry sources said this surge in popularity, built on the growth of an affluent, image-conscious middle class in emerging markets in South America and Asia, could mean that some distilleries and producers might temporarily run short of supplies, as whisky production has a lead time of 10 to years or more. The association calculated that this rate of sales meant the whisky industry was earning £125 every second for Britain’s balance of payments, making it the “stellar” export performer and the most successful of all “fast moving” products made in the UK.
The final overseas sales value of whisky, which helps support 10,300 direct jobs and 35,000 suppliers’ jobs, could be as much as £10bn. The best-selling brand is Johnnie Walker, made by Diageo, with 20% of the market.
The industry is a huge earner for Britain, but still held back by at least two legal constraints. The first issue is the normal process of the regulation and control of alcohol both here and abroad. The second is the behaviour of those countries who impose high tariffs (import taxes) to protect their own domestic drinks industries.
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