Fast Food in Australia - Essay Example

? MARKETING AUDIT Table of Contents McDonald’s Australia – Company Overview 3 Marketing Audit Objectives 3 Marketing Audit Scope 4 Methodology 5 Objectives of Data Collection 5 Types of Required Data 6 Secondary Data 6 Primary Data 6 Data gathering process 7 Findings and Analysis 7 Annual plan control 7 Profit control 8 Efficiency control 10 Strategic control 10 Conclusions and Recommendations 12 References 13 Bibliography 14 McDonald’s Australia – Company Overview McDonald’s Australia is the Australian counterpart of the multinational company named McDonald’s Corporation which is regarded to be one the largest fast food restaurant chain in the world and was founded in the year 1940, headquartered at Oak Brook, Illinois, United States (Yahoo Finance, 2012). McDonald’s being a global organisation which operates its business activities worldwide and its operations have been segmented into four different areas namely, a) Asia Pacific, Middle East, and Africa (APMEA), b) Latin America and Canada, c) Europe, and d) United States. McDonald’s Australia is a constituent of the APMEA group. This group accounts for almost 18% of the total revenue generated by the firm and within this group China, Japan and Australia accounts for the maximum amount of revenue. According to the McDonald’s Australia Corporate Responsibility & Sustainability Report 2012, there were around 808 McDonald’s restaurants spread all over Australia as at 31 December 2009 (McDonalds Australia, 2010). McDonald’s Australia Limited operates its franchisee business in Australia and more than 70% of its restaurants are locally owned (McDonalds Australia, 2012). The head office of McDonalds Australia is located at Thornleigh, New South Wales and its four regional offices are located at Perth, Melbourne, Adelaide and Brisbane. Marketing Audit Objectives The primary objective of the marketing audit of McDonald’s Australia that has been discussed in this report is to increase the sales of the company in Australia so as to generate increased profit for the company. The marketing audit has been undertaken to identify the various avenues through which the company can have a 7% annual growth in sales revenue generated in Australia by the end of the year 2013. Based on this primary objective other related marketing objectives of McDonald’s Australia to achieve its target would be to open up new restaurants in different parts of the country, increase brand awareness amongst Australian people to help increasing the customer base of the company, promotion of its products, and creating competitive advantage in the fast food retail industry by strengthening its core competencies and catering to the specific needs and requirements of people based on their specific tastes and preferences. Thus the marketing audit report presented in this study would help the company to identify key performance indicators that can be helpful in formulating the marketing strategies of the company in an effective and efficient manner. Marketing Audit Scope The marketing audit of McDonald's Australia would be performed using secondary data from various authenticated sources. The marketing audit would mainly cover five broad aspects as discussed below: Situational Analysis: The situational analysis of McDonalds includes its SWOT analysis. The marketing audit report would try to analyse all the strengths and opportunities of the company which could be utilised to achieve its marketing objectives. Moreover the identified weaknesses and threats of the company would also be helpful to suggest ways of converting them into company’s strengths and opportunities. Internal audit: This would include the analysis of the internal environment of the company covering some key areas like human resources, research and development, financial budget and marketing strategies followed by the company. Environmental audit: The environmental audit of McDonald’s would be based on mainly the PESTEL analysis that would help to have a better understanding of the Australian market relative to the fast food industry in the country at present and its impact on the company. Competitor analysis: This would include an analysis based on the identification of the performance of the major competitors of McDonald’s Australia and also the direct and indirect customers of the company. It would thus give an idea about the existing customer base of the organisation and its composition based on various characteristic features. Consumer analysis: The marketing audit would also try to analyse the target market of the company at present and based on that the effectiveness of such targeted customers to the company’s profit and sustainability would also be analysed. Thus the marketing audit of McDonalds would basically be a marketing environment audit covering most of the internal and external environmental factors associated with the company. However his marketing audit is limited to mostly a qualitative analysis of the company using secondary data and not much primary data would be utilised to assess the marketing environment of the company. Methodology This section explains the different sources of data relevant to the study that would be utilised to perform the marketing audit of McDonald’s Australia. The data collection procedures, the corresponding timeframe to collect those data, and the types of data required to conduct the audit has been explained in this section. Objectives of Data Collection The primary objective of data collection is to gather information related to the internal and external environment of the company that would help in performing a detailed analysis of the various environmental factors affecting the company. The historical and current data of the company would help to identify the trend and estimate the future projections of various marketing objectives that can be achieved by the company. Hence data collected would serve for the purpose of setting feasible targets related to the marketing activities that are to be performed by the company. Types of Required Data The required data for conducting this marketing audit includes data related to the overall performance of the fast food industrial sector of the Australia’s economy. The internal data of the company related to previous years’ performance related to sales, its distribution network, etc. would be useful in analysing the internal environment of the company. The data from SWOT analysis and PESTEL analysis performed for the company and the fast food industry in Australia would also be utilised to perform this audit. Moreover the data related to the performance of the major competitors of the company would also be used in this study. In addition to this, the data related to existing customer base of the company would also be helpful in performing the audit. Secondary Data Primarily secondary data sources would be utilised in this data. The secondary data sources include data obtained from various authenticated websites like Market Line, McDonald Australia’s website, the websites of the identified competitors of the organisation, the recent annual report of McDonald’s Corporation, the website of Australian Bureau of Statistics (ABS), newspaper websites containing information related to the company’s business activities, and syndicate data services like AC Nielson. Primary Data Mainly qualitative methodology would be used to analyse the data obtained in this study. It would include detailed analysis of the collected data mainly from secondary sources to help in the identification of the major problems or issues concerned with McDonald’s Australia. Quantitative methodology used in this study would be mainly focused on analysing the previous sales generated by the company and current distribution network of its restaurants in different parts of Australia. Data gathering process Since most of the data needed for this marketing audit are required to be obtained from secondary sources, the timeframe for obtaining such data is short and it took around two weeks time to gather all the relevant data required in this study. The set budget to conduct the data gathering process is also not that significance since most of the data obtained in this study was available freely and no costs were required to be incurred to gather all the information and data to conduct the marketing audit of the company. Findings and Analysis This section presents a comprehensive view of all the data that have been collected to conduct the marketing environment audit of McDonald’s Australia. The findings of the marketing audit have been analysed to help in the identification of major concerning areas of the organisation which could be improved upon. Both the findings and analysis of the collected has been presented here covering all the five aspects that have been identified as the scope of this marketing audit. Annual plan control The sales generated by McDonalds Corporation in the past 6 years of its operations have been presented below (Figure - 1): Figure – 1 Sales Summary Source: (McDonalds Corporation, 2012) The sales figures of McDonald’s Corporation indicate that the company has been able to increase its sales generation over the past 6 years excepting the year 2009. Global sales growth was around 5.6% in 2011 as compared to 2010 (McDonalds Corporation, 2012). The latest data suggests that the It has been mentioned in the 2011 annual report of the company that the APMEA group have almost doubled its contribution towards the overall revenue generated by the firm. Furthermore McDonald’s Australia is one of the major contributors to the APMEA group. Since McDonald’s Australia is a privately owned company hence its financial results are not published publicly. However, the overall performance of the McDonalds Corporation and suggests that McDonald’s Australia have been successfully operating its business operations and have been able to maintain a constant growth in its sales generation. Profit control The profit control aspect of McDonald’s Australia can be analysed through the identification of the products offered by the company and the distribution network of its restaurants in various regions of Australia. The restraints of McDonalds Australia offer a variety of products for the customers which are mainly quick saved products. Some of those products offered by the company include hamburgers, chicken sandwiches, cheeseburgers, french fries, chicken selects, milk shakes, salads, ice creams, desserts, cookies, muffin, soft drinks, etc (Marketline, 2012). This suggests that that the product mix of the company is quite diverse in nature and caters to a wide variety of customers according to their different tastes and preferences. The company has a worldwide presence and operates through almost 33000 outlets. McDonald’s is considered as the largest fast food restaurants of the world. The restaurants of McDonald’s can be found in almost 119 countries of the world. The company mainly focuses on developing sophisticated network of suppliers. The company is also active in protecting its market reputation by offering high quality products and services. In Australia McDonald's has 808 restaurants spread over six states and employs around a total of 85,000 people (as at 31 December 2010). The distribution pattern of the restaurants of McDonalds Australia is shown in the figure given below (Figure - 2): Figure – 2 Distribution of Restaurants Source: (McDonalds Australia, 2010) The distribution network of the restaurants of McDonalds in Australia suggests that its restaurants are mostly concentrated in three states namely, New South Wales (NSW), Victoria (VIC), and Queensland (QLD). Also it is noticeable that the number of franchisee stores of McDonald’s is double the number of company owned stores in Australia. Hence the restaurants of McDonald’s Australia are not evenly distributed all over the country. Efficiency control The efficiency control of the marketing activities followed by McDonald’s Australia can be better understood through the measurement of the company’s efficiency related to its sales promotions and advertising activities. The increase in sales revenues of the company suggest that the promotional activities undertaken by the company has not been successful significantly. Among the marketing mix of the company, promotional mixes always embraced a significant position. Advertising, sales promotion and public relation are the three major elements which the company employs for its communication purposes. However they also make use of direct marketing and personal selling as the promotional tools. The company also spends high amount of money in its overall marketing strategy. All these facts suggest that McDonald’s Australia has the opportunity to make its sales promotion and advertising activities more effective to increase its efficiency and achieve the target of increasing its sales revenue in a significant manner. Strategic control Strategic control of McDonald’s Australia relative to its marketing activities can be better understood from the facts obtained from the external situational analysis of the company. External situational analysis includes identification of opportunities and threats affecting the company as indicated in its SWOT analysis and the analysis of the external environment of the company using PESTEL analysis. Figure – 3 Growth of cafes, restaurants and takeaway food services in Australia Source: (Australian Bureau of Statistics, 2012) The opportunities of the company include emerging markets, tapping more market segments in Australia and development of more healthy and hygienic food that offers balanced diet. On the other hand threats experienced by the company include excessive tax needs to be paid to the government of Australia, saturation of the fast food industrial sector of Australian economy, intense competition from Dominos & Subway, and changing demographics. In the context of the present market scenario of Australian economy suggests that Australia is a politically stable country. Australia ranks among the top developed countries. The GDP per person is nearly $44,000. The top performing sectors of the country includes agriculture, retail and tourism. Quality is preferred over quantity by most of the consumers in Australia. The technological impact on the Australian economy is quite significant and information and communication technology i.e. the use of internet in the household has increased rapidly. Australia mainly comprises of semi arid or desert areas and pleasant environmental conditions are prevalent in Australia. All these facts suggest that Australia is a developed nation and the standard of living of the people is quite high. Hence, McDonalds can afford to introduce high priced menu of food items in its restaurants in the country. Next the competitor analysis of the company suggests that its market share is getting affected because of the presence of major competitors who are identified to be Retail Food Group (Australia), Subway Restaurants, and Hungry Jack's (Marketline, 2011). Indirect competitors of the company like KFC Corporation, and Starbucks Corporation also plays a significant role in providing a competitive threat for the company. The target customers of the company have been mainly identified to be the people of teenager groups and families. Conclusions and Recommendations McDonald’s Australia has been successfully running its business operations in Australia. However there are some issues or problems related to the efficiency of the company to successfully implement its marketing strategy. The historical sales growth of the company has not been that significant. The number of company owned restaurants in Australia is significantly low. Moreover the restaurants are not evenly distributed all over the country. Hence it is suggested that the company should increase its restaurants mainly in those Australian states where there it has significantly less number of restaurants. This would help in increasing the customer base of the company and thereby leading to the increase in sales generation. Apart from this it is suggested that the company should invest more on research and development to develop more innovative products of high quality which would be preferred by most of the Australian people. Next, it is suggested that the company should target other segments of the Australian market which is still uncovered by the company. All these activities would ultimately lead the company towards achieving its marketing objective of 7% annual growth in sales by the end of the year 2013. References Australian Bureau of Statistics, 2012. 8501.0 - Retail Trade, Australia, August 2012. [online] Available at: [Accessed 11 October 2012]. Marketline, 2011. Fast Food in Australia. MarketLine Indiustry Profile, pp. 1-34. Marketline, 2012. Company Profile: McDonald's Australia. Marketline, pp. 1-8. McDonald’s Australia, 2012. 2011 EEO Report. [pdf] Available at: [Accessed 11 October 2012]. McDonald’s Corporation, 2012. 2011 Annual Report. [pdf] Available at: [Accessed 10 October 2012]. McDonalds Australia, 2010. McDonald’s Australia Corporate Responsibility & Sustainability Report 2012. [pdf] Available at: [Accessed 10 October 2012]. Yahoo Finance, 2012. McDonald's Corp. (MCD): Profile. [pdf] Available at: [Accessed 10 October 2012]. Bibliography DePamphilis, D., 2011. Mergers, Acquisitions, and Other Restructuring Activities: An Integrated Approach to Process, Tools, Cases, and Solutions. 6th ed. Massachusetts: Academic Press. Hill, C. W. L., and Jones, G. R., 2012. Strategic Management Theory: An Integrated Approach. 10th ed. Connecticut: Cengage Learning. 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