Marketing Group Case Analysis

In: Business and Management

Submitted By vwsale
Words 837
Pages 4
Marketing Channel
MAR 4203

Raquel Eskenazi 3997201
Michael Perera 3004721
Mauricio Etienne 4932817
Antonio Kiriakov 5361314
Kevin Hodgeson 3964446
Andres Lacayo 3342194

1. Is McDonald’s trade-up strategy to the McCafe line of premium coffee products a good deal for the franchisees? Why or why not?

The McDonald’s strategic initiative to bring full range of coffee products into its franchisees to all its US stores, created large amount of excitement to the restaurant industry and the press as well. Bringing new line of coffee products would mean direct competition with the primarily competitors; Starbucks and Dunkin Donuts. In reality what really mattered to all those 14,000 franchisees was whether the new line of premium coffee products would be a good thing for them. Either winning or losing from the franchisers point of view was all about whether the new McCafe product trade-up strategy would bring more sales and profits to their stores. Even though there is a lot of talk in the press and it has been largely discussed by store owner, I believe that McDonalds trade-up strategy would be successful. McDonalds is a brand that has been accepted by all Americans, furthermore it is brand that is mostly visited by the Middle Class of people. Furthermore the expectations are that McCaffee premium coffee products would add an average of $125,000 in additional revenue per store; the premium coffee products will also attract more off-peak customers. Other than all this McDonalds products are more price competitive than the major competitor for the market share – Starbucks. If quality is satisfying most of Americans would rather pay less than pay more, therefore McDonalds trade-up strategy would most likely be successful.

2. If McDonald’s McCafe premium coffee trade-up strategy turns out to be highly successful, do you think other fast-food…...

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