McDonald’s Corporation History

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Pakistan is a land where many cultures co-exist. This discrepancy is mirrored in the eating habits and consumption patterns of the local masses as well. In recent years, significant shift has occurred in consumption pattern of locals. A dramatic surge in fast food consumption has been noticed over the past few years in Pakistan. Social and business landscape has changed a lot. Number of working women (working moms specially) is increasing day by day. Fast food provides quick and easy solution for job holders that don’t have time to drive a long way to a restaurant and then waiting more for the food to be served. Fast food is easy to carry around, save time, good in taste and convenient to carry and eat. Moreover, youth that constitutes a significant chuck of total population is becoming more extrovert and following western trends. Fast food chains are becoming more of a status symbol in our society now days. These restaurants are becoming social places for get-to-gathers, celebrations and source of spending quality time along with tasty food. Moreover, tastes and preferences of consumers are changing too. All these factors are prime reasons behind why people prefer fast food. Because of the emerging market trends in fast food industry, the casual taste among general masses is congregating. The changing consumer preferences, shifting lifestyles and presence of multinational fast food chains in Pakistan have further triggered and facilitated the fast food consumption in last two decades. A key factor behind the success and dominance of these multinational fast food chains in Pakistan is their market led approaches. These chains have resorted to market driven strategies and transformed their menus, promotional mix and communication channels to satisfy local customers’ needs. In Pakistan fast food industry is growing year by year at a very fast rate due to innovation and the presence of multinational chains like (McDonald’s, KFC, and Domino). These multinational chains have set high levels of revenue generation by using market led approach and by modifying their menus.

Many consumers see multinational fast food restaurants as symbols of the wealth, progress and well-ordered openness of Western society and therefore become trendy attractions in many cities around Pakistan, particularly among younger people with more varied tastes. Due to such aspect there is a rapid increase in trend of fast food restaurants outlets in recent years. There are ‘satellite ‘shaped outlets which have a very little or no seating capacity formed in non-traditional places such as plazas, office buildings, airports etc. This is done to provide more convenience to the final consumer. There is nowadays not just in Pakistan but all over the world hectic jobs which people try to cover on daily routine and tend not to go to places to eat instead they call in urgency for food. Such scenarios also build the rate of growth of a product. In Pakistan, similar kind of situation has been developed over the past years and people are trying to save their job time as much as they can. Secondly an option has increased due to innovation of fast food in the category of eatables and it has become a taste for the consumers of all ages due to separate type of meals with different prices suitable for everyone.

Reportedly, fast food industry is still in its infancy, as quoted by McDonalds Pakistan Country Director. Nevertheless, recent statistics also demonstrate that fast food industry growth is augmenting 20% annually. These statistics strongly imply that in Pakistan it is one of the fastest growing business with a lot more potential for further growth. Likewise, this signifies a hefty untapped market which can be exploited by local businesses and international/multinational brands as well.

Competitors’ Analysis

Indirect Competition: Fast food chains and restaurants offering burger e.g., KFC, Subway, Burger King, Mr. Burger, Chicken Cottage, Hardees

Indirect Competition: Non-Pizza establishment (fast food chains) e.g., Pizza hut, Domino’s, Nando, Italian Pizza

Dynamic Research Consultancy, a technology oriented research agency, conducted a survey in October 2013, to gain insight and analyze different dynamics aspects this industry in Pakistan. The sample consisted of males and females. The age of sample was 16 and above. Sample was categorized in two groups i.e. youngsters (16-22) and matures (> 22 years). The sample was geographically extended across three major cities (Karachi, Lahore, Rawalpindi/Islamabad). Rationale behind categorization of sample with respect to gender, age and location was to facilitate comparative analysis.

The result showed that females outnumbered their male counterparts in fast food chains’ visits. Another interesting key discovery was more popular with females than with males. Statistically, 42% females were consuming McDonalds compared to only 33% males. Likewise in the case of Nando’s results verified that 2% females regularly visit Nando’s compared to only 12% male respondents. Chicken Cottage ranked the least preferred across both age groups and genders. Another key finding was that the average frequency of fast food chain visits amongst both the age groups was once a week. Even though youngsters are more likely to visit frequently, still mature adults demonstrated proclivity towards fast food consumption. Another interesting finding was that all fast food chains, except Domino’s and Chicken Cottage, are more popular with mature adults as compared to youngsters.

Interesting findings were unearthed regarding geographical consumption patterns of fast food. Survey’s findings showed that most prominent fast food chains in twin cities (Rawalpindi and Islamabad) are KFC, McDonald’s, Domino’s Pizza and Chicken Cottage. In case of Karachi, Pizza Hut, Bar B Q Tonight, Arizona Grill and Nando’s are performing relatively better compared to other two cities. Hardee’s was performing a little better than in other two cities. Similarly, Subway was performing slightly well in Karachi.

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McDonald’s Product Development[pic 3]

The company plans to introduce Pizza. The aim is to get market share as much as possible covering the spent money on the overall product its advertising and launch. This new opportunity can help company further penetrate by this new product line extension. This decision is being made after extensive market research. MacDonald’s is a market oriented company. As McDonald is entering in an existing