Ch. 15 Retailing

Mc Donald’s is the No. 1 ranking food retailer. They almost make a monopoly of the fast food industry. And more than 80% of the restaurants are franchised by the local business people. Mc Donald's basic philosophy includes the good relation with the franchisees. Because the relationship with the franchisees is not good they can't improve quality, expand the market and increase the value. To open up a new Mc Donalds it can cost anywhere from $511,000 to $ 1 million. The form of franchise McDonalds uses is a business format franchising which is a relationship with the franchisor and the franchisee. The franchisee must meet with all the requirements of the franchise and the franchisor expects all the requirements to be fulfilled according to the restaurant.

Price is one of the most important aspects in the retailing mix. Mc Donalds is quick and affordable and that is what people want and need. The lowest price settlement brings huge benefit to the business. Mc Donlds’ sales rose dramatically by emphasizing on dollar menu options, such as Mc Muffins and coffee.

Also, location plays key role on Mc Donalds way to success. As we know from Chapter 2, Mc donalds key strategy plan is geographic advantage. The proper locations boost the company as well. The fact that McDonalds offers a drive- thru option is great for people who are on the go and are looking for quick meals. It makes it more convenient for drivers and that’s what people are looking for, something that involves low to no action on their part. Also, the practical location would be any place where there are lots of students or workers. They want something instant and on the way since we are usually all in a rush to get to their destination.

I recently went to the McDonalds that is right by our school on chambers street. Every single visiting, the store is all packed by the overwhelming people. I believe the success is due to their location and the price. We have a college and a high school right next to the location. Also, Tribeca is full of other busy business men and women. Consumers want diversity and not your average coffee and meals from a street stand. Also, the price of Mc Donalds is a big plus, because Tribeca is very expensive area, it is really hard to find a place to get a meal within 10 dollars. I am personally one of the big fans of Mc Donald's because they have good, cheap, various food and fast service. They are conveniently located in most areas, so it's really easy to find one. Most of time, I choose Egg Mc Muffin and Mc coffee for my breakfast, which just cost me 3 dollars more or less and it is literally FAST food that can be served in 1 minutes.