Posted: November 27th, 2013
Product Life Cycle- McDonalds
McDonalds is one of the mostly recognized and best-known brands worldwide. It is the world’s largest hamburger and fast foods chain of restaurants. The food store has a customer base of about fifty million customers daily. Its business plan is structured in a way that a branch might be owned by the corporation, an affiliate or a franchisee. The company deals in cheeseburgers, chicken products, hamburgers, French fries, soft drinks, desserts and shakes. The company has grown considerably over the years since it has opened branches in several states across America. The company is also found in 119 countries around the world. The company earns its revenues by investing in properties and franchising together with operating of restaurants.
The company is in the market maturity stage of the product life cycle. In this stage, the strong growth in sales by the company is diminishing. At this stage of the product life cycle the competition may appear with similar products like Burger King is doing to McDonalds. The primary objective that a company should focus on when at this stage of the product life cycle is to defend its market share and try to maximize it profits. At this stage also, the features of its products might be enhanced or the company might try to implement other products in order to create a stiff competition for its competitors (Sparks 12). For instance, the company has introduced a new type of food called a salad that targets its health-minded customers.
The pricing of the foodstuffs have also been revised lower to fight the competition. The distribution plan of the company has also been revised to become more intensive and with increased incentives to encourage customers to choose McDonalds over its competitors. All these characteristics are of a company in the maturity stage and so is the McDonald’s company. Among the three positioning strategies, McDonalds uses the breakaway positioning strategy. This strategy is where the product escapes from its original category and deliberately associates itself with another product. The marketers of the product change the category in which the products are consumed and the competitors with whom they compete with (Youngme 89).
The strategy selection that McDonalds has chosen is indeed fit for the company since it deals with products. Since products are tangible and due to the constant exposure the consumers learn how to easily encounter and experience new features while the products still evolve. The consumers have a welcoming feel to the new product options. However, this only occurs where the product is mature in the market and only where the purchasing of the item is routine and mundane. This is indeed how the McDonalds products are structured since their customers buy them regularly and is a sort of a routine exercise for them. The continued extending of the brands gives diversity to the products which is what the consumers seek and what might keep them faithful to the brand but however, if the product keeps on increasing in diversity, the ignition of passionate buying that the breakaway system ignites are reduced (Sparks 14).
Breakaway positioning makes it easy for customers and consumers to make judgments of familiar products and increases their desire for uniqueness. The type of positioning also fends off competition by limiting the efforts of copycats. Companies mostly dealing with products should acquire the breakaway positioning strategy by trying to combine the unique features found in their products in all categories. This can make the company actually develop a maturity for their product and make it grow further. Companies should also remember that their distribution channels, their promotions, the design of their product and their product pricing determine greatly what category the product shall fall in, in the market.
Youngme, Moon. “Break Free From The Product Life Cycle”. Harvard Business Review (2005): 87-94. Print.
Sparks, John. “Different Ways to Think about Products”. MKT 301 Web Notes: Products and Brands. (n.d.). Print.
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