Operations Management Along the Supply Chain - Essay Example

The main goal of the new product is to capture the upcoming healthy food segment, penetrating the market with a strong presence, grabbing market share, and contributing to the revenue.

            The proper combination of the Marketing mix, which is a product, price, place, and promotion, and the determinant attributes can lead to a successful product. As far as the product is concerned, it is just fit for the upcoming healthy food market. People can’t resist finger licking fast food irrespective of the alarming rate of obesity in the United States. However, in this scenario, if the Fast food lovers get an option to have the same tasty food but with lower calories as just 250 units instead of 470 units in Wendy’s single sandwich and 670 units in Burger king’s Whoppers respectively.   The vegetarian option is very promising, it has been seen that only three percent of Americans are completely vegetarian. However, almost sixty percent prefer food that is meatless (Campbell, 2008, p 91). This revealing data says that Americans want foods that are vegetarian in nature. And they would love to have that with the brand name of McDonald’s.

            The pricing is very much important. McDonald’s has always adopted the penetration pricing strategy. And that is the reason it is the largest seller of fast foods in the world. The combo healthy meal price is only $ 3.59, which is very much competitive and the individual price for the baked patties burger would be only $ 1.09, the mash potatoes at $ 1.50, and the smoothies at $ 2.29. The interesting part is the combo gives a saving of $1.29 with respect to the individual items if they are bought all by any customer. This pricing strategy would definitely help the new product to penetrate the market easily.

            The place for the pilot project for the healthy meal has been chosen wisely. Colorado is famous for McDonald’s. Once a McDonald’s branch made a record of having 349 transactions in an hour. However, the average transaction is one in a minute in most of the branches compare to 3.5 per minute in other fast food joints in Colorado (Russell, and Taylor-Iii, 2008, p 231). Promotional activities are very much in-house-oriented. And as the product is under the testis should not be promoted to higher-level as if it doesn’t go well in the market then it would draw a negative effect in the market for the brand.

Targeted market share:

            McDonald’s is the top fast-food company in the United States. It is having the highest market share. It is had a 7.3 percent market share in 2002 while the main competitors for the new item were Subway and Taco Bell and they were having a 1.9 percent market share each. (Vaidya, 2006, p  393). While the fast-food market was booming the new trend on the other side was the alternative vegetarian meals. As the vegetarian fast food market is not that big as the nonvegetarian market so the company should look for an 8 percent market share and 10 percent growth every year with respect to the new product.

            The product can contribute in a larger manner. As the establishment cost is not required as it is getting cold in the old branches. So the production cost and the cost of sales would affect. The cost of sales would include the promotional costs. So if the product goes well in the market then it can be a great hit like the Mac Chicken burger in the past. For many new franchisees of McDonald’s this new product would contribute strongly towards the break-even in a faster manner.