- Background
Health and fitness have become increasingly important issues in the twenty-first century. With concerns about rising obesity levels and a greater understanding of the importance of good nutrition, consumers have been demanding healthier food options from their out-of-home dining choices. This is perhaps most apparent in the quick service or fast-food restaurant industry, which has had to undergo something of a revolution in recent years. The choice for this industry is clear: respond to changing consumer needs, or suffer the consequences. McDonald’s has in the past responded to this challenge with the introduction of healthier choices in the menu range, campaigns to de-mystify ingredients and a recent agreement to ban cage eggs from the menu in late 2014. However in spite of their attempts to keep in touch with consumer sentiment and social norms, many stores are experiencing reductions in turnover for the first time in many years. Rising youth unemployment (11.6 % prediction by the ABS in May 2014) is one reason being proposed as well as changes in consumer food preferences and the proliferation of healthier fast food options.
With 761 stores in Australia and 1.2 million customers visiting these stores daily, McDonald’s Australia needs to undertake the necessary market research required to ensure they are aware of changing consumer sentiment and to position themselves to respond to any changing societal issues. In the mid-2000s McDonald’s Australia reinvented the brand with the introduction of the McCafe concept which was eventually rolled out to several other international markets. In spite of this innovation, it is now time to consider more changes to bring the brand more in-line with recent changes in consumer sentiment and values.
This ability to move with the times is what made the McDonald’s business successful to date. The first McDonald’s restaurant opened in 1955 in the United States, and in 1971, Sydney’s western suburbs became the home of the first Australian McDonald’s. A customer focus on family-friendly affordable meals ensured rapid expansion. Around two thirds of Australian McDonald’s restaurants are run by franchisees. The franchisee pays for the right to use the franchisor’s name, products, and display methods. Franchisees receive company support and benefit from the established goodwill of the franchisor.
Meeting stakeholder needs in a changing business environment
The business environment is not static. It evolves with time, reflecting changes in the broader social environment. Our lifestyles are very different to those of our grandparents and even our parents, partly because technological advances have transformed the workplace and the family home. The pace of life is increasing, and many families turn to the convenience of takeaway and fast foods on a regular basis. However, change is pushing the foodservice world in different directions. Advances in healthcare and preventative medicine have stressed the importance of a healthy diet. Increased access to mass communications, such as television and the Internet, has meant that consumers are becoming savvier about health issues, and are demanding better choices in convenience foods.
As the business environment changes, so too do the views of stakeholders. Stakeholders are those groups or individuals who are affected by the activities of a business. McDonald’s Australian stakeholders are diverse, and include:
Customers – who range from the very young to the elderly;
Business partners – including franchisees and suppliers;
Employees – with more than 65,000 people employed throughout Australia; and
Opinion leaders – or people who shape the ideas of the nation, including the government, the media, health professionals, and environmental groups.
Description
Marks out of
Wtg(%)
Due Date
Words
Assignment 1
100
20
10 April 2015
2500
Reconciling the interests of stakeholders is crucial to continued business success. Compare it to a three- legged stool. If one leg is weak or not properly aligned, the entire stool is weakened and can topple over. A strong relationship between McDonald’s Australia, its franchisees and its suppliers is essential, with all elements working together to meet customer needs. Responding to a changing business environment is easier if the basic structure is strong. Keep in mind that change is a two-way street. Businesses are affected by the external environment – but they also help to shape and create that environment. Stakeholders are coming to expect more from businesses in terms of corporate citizenship and social justice and conscience. Businesses need to be mindful of the effect they have on the broader community, including the health of its youngest members. McDonald’s Australia’s philosophy is to be continually responsive to market demands, and accept that there is always more to learn. Catriona Noble, the Chief Operating Officer of McDonald’s Australia, notes that, ‘Social responsibility challenges are always evolving and we are focused on learning from experts and adapting our operations to maximise the positive impact we can have on our society.’
Responding to consumer needs – assignment overview
McDonald’s Australia’s approach has been to listen and learn and to use targeted market research to ascertain the needs of customers and other stakeholders. At this time the management team is interested in knowing the answers to 3 main questions:
1. What are the current attitudes and values of the general population toward the consumption of fast food? Specifically in addressing this question, they want to know:
o Why do people eat fast-food? (what are their psychological or situational motivations for consumption)
o Have there been any changes in society that have impacted the amount and type of fast food being eaten?
o Is consumption of fast food falling? (how many people eat fast food, how often and who are the highest user groups)
o What are the main competitors for fast-food consumption and does this vary with different segments of the business?
o Are there any opportunities for growth in this market that McDonalds is currently not targeting?
2. How does the general population view the McDonald’s brand in terms of its social and environmental responsibility? Specifically they also want to know:
o Are there differences in these views for different customer and stakeholder segments? o Has there been any changes in the views of the population on this issue and if so what
and for whom?
o Does the perception of social and environmental responsibility impact sales and if so how
and for which stakeholders?
3. What are the current perceptions of McDonald’s employees in terms workplace satisfaction?
Specifically they also want to know:
o Is McDonald’s seen as an employer of choice?
o What do staff believe is good and not good about working for McDonald’s?
o Are there are any workplace or ethical issues felt by staff in relation to their workplaces
or management policies?
The Assignment Task
You are required to pick ONE of these questions to focus on for your assignment. You have been asked to design a program of research for McDonalds to uncover the answers to these questions. Specifically you need to outline the research design you would recommend and what data collection and statistical tests, if any, should be used to help the management team at McDonalds answer their questions about the future issues facing the company.
Your report should include the following elements:
1. A brief introduction of the program of research that would need to be done to address the question you have focused on. It is conceivable that you may conclude that to address your question, a
coordinated program of research is needed that includes a number of different sub-projects. This is fine. You only need to describe this and then choose ONE of these sub-projects to focus on for the remainder of your assignment. If your research design is just one piece of research then you have already focused for the remainder of your assignment;
2. a statement of the research question(s) and objectives for this piece of research – what is it you intend this research program to achieve and what questions it will address – keep this focused and brief;
3. a short literature review or summary of secondary data from existing sources that relates to your research question (approximately 500 words) for example if you are exploring people’s fast food eating preferences then you might explore what is already known about the changes in food preferences, food values and society’s reaction to fast food. By contrast if you were exploring consumer sentiment about social responsibility you would investigate what currently we know about this issue. This literature review is specifically designed to provide background information on the issue (what we already know so that you can build on this knowledge); what previous research has been done in this area (what techniques and tools were used that you might also use); and what remains still unknown (the focus of this research). You should look to build on the research designs previously used in any existing studies;
4. a recommended research design and methodology justified and supported with appropriate theory (from the applied business research literature) and evidence. This includes discussion about whether you are recommending a qualitative or quantitative approach (and why – justified and supported with theory), and within this what specific methods you are recommending (from the list of possible options) and why;
5. recommendations about the most appropriate sample unit and sampling methodology (also with justification) to match the design you are recommending and in this discussion show you have identified issues related to the research ethics of this proposed research and how you will address these;
6. a discussion of the data (questions) that would need to be collected – being as specific as possible and showing evidence of an understanding of the form and level of data required to answer the research questions and how these ultimately will allow you to address the overarching research objective or question;
7. a discussion of the type and level of analysis that should be conducted with this data to address the research questions (supported with theoretical justification); and
8. a discussion about the validity and reliability elements of your proposed research plan and any limitations of the research that should be considered by the McDonald’s board when viewing your findings and suggestions.
