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McDonald’s Failing to Hoist Sales

big-mac2As the world’s biggest hamburger chain, McDonald’s serves to over 68 million customers daily in over 115 countries. Like every other restaurant or fast food place around the world, the corporate officials McDonalds look to introduce new marketing techniques to draw in more and more customers. Techniques like the Angus 100 percent beef patty and more healthier options like salads and wraps have helped improve McDonald’s image ever since the release of the movie “Super Size Me”. The movie aimed to inform the average customer what you were really eating when eating McDonald’s, and for 30 days, a man named Morgan Spurlock did just that. He consumed McDonald’s for breakfast, lunch, and dinner for 30 days straight to see what would happen to his body. Ever since then, McDonald’s has been looking to revamp their image by incorporating new tactics and ideas. One of latest tactics used by McDonalds was their infamous Dollar Menu. Anything on the menu is within or slightly over the price of a dollar, not including tax. Once other big name corporations got word of this Dollar Menu, they began to create their own. For a while, the Dollar Menu proved to be somewhat successful, but recently things have been changing.

In the past month, reporters have noted that important sales measurement fell 1 percent during this period, threatening to fall even more within the coming months. 1 percent may not seem like a lot, but when you are pulling in over 27 billion dollars annually, it may be more than you think. The Huffington Post stated that “although profit margins declined during the first quarter, McDonald’s noted that it picked off market share in many parts of the world, including the U.S.” For the three months ended March 31, the global sales drop included a 1.2 percent decline in the U.S. It fell 3.3 percent in the region encompassing Asia, the Middle East and Africa, reflecting weakness in Japan and a 4.6 percent drop in China. The company blamed the decline partly on the aftereffects of the recent scare of the chicken supply for KFC. Other fast food restaurants like Wendy’s and Burger King have amped up their marketing and could possibly be a reason why McDonald’s numbers have fallen in such a short amount of time. In order to compete with these rival companies, McDonald’s must make change, because change is good. I feel that the best way for success is to explore all possible options and most of the time, that calls for change. Learning from what change was successful and what wasn’t. Also by learning from what other companies do and what works for them and what doesn’t.

Amcdonalds-vs-burger-kings customers, we look for the restaurant with the cheapest, but best quality food. Most of the time, McDonald’s is at the top of the list when it comes to cheap prices, but falls pretty low when it comes to quality of food. As more and more customers see that McDonald’s prices are being matched by restaurants like Burger King and Chik-fil-a, while having better quality food, customers tend to substitute. According to investopedia, the substitution effect is the idea that as prices rise (or incomes decrease) consumers will replace more expensive items with less costly alternatives. But like I said, if the prices of McDonald’s and their competitor are the same, but one is known for being better quality food, which do you think the customer is going to choose? This effect occurs in our everyday lives and most of the time, we don’t even realize we’re doing it.

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