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Marketing Plan For Mcdonalds Uk Add in library

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Question:

Describe about the Marketing Plan For Mcdonalds Uk?

 

Answer:

Breakeven analysis

The break-even analysis thus calculated by McDonalds will show the company the appropriate level of revenue that the company needs to earn in order to cover the fixed as well as the variable expenses (McKinney, 2012). McDonalds for the purpose of calculation of the breakeven units and revenue as made the following assumptions:

Average per unit revenue (P): £ 3.00

Average per unit variable costs (V): £ 1.00

Estimated monthly fixed costs total (FC): £ 24,000

Hence the BEP,

PX = VX + FC

Or X = FC / (P- V)

Or X = 24000 / (3-1)

X = 12000 units

Thus based on the assumptions McDonald needs to sell 12000 units in a month to attain the break-even point. Thus, the monthly BEP revenue is as follows

12000 units * 3.00

= £ 36000

Thus McDonalds in a particular month needs to sale at least £ 36000 in order to cover both fixed and variable costs. In order to make profit the net monthly sell of McDonald needs to exceed £ 36000 (Ogilvie and Laurens, 2009).  

Profits & Sales

 

Sales forecast

The financial managers at McDonalds UK are anticipating high sales growth in the months starting from November to January (Sorger, 2012).  Festive celebrations occur during these months and thus McDonalds that is primarily a family restaurant in anticipating high footfall in the stores during these seasons.  The major target segments of McDonalds are the families with kids falling within an income range of £ 2000 – 50000. Thus, the holiday season and the festive celebration of Christmas are anticipated to be the two major driving factors for increment of sales (McDonald and Morris, 2012).

 

Burgers  (£)

Chicken strips  (£)

Breakfast sandwiches  (£)

McVeggies (£)

Month 1

10000

20000

10000

6000

Month 2

10500

21000

10200

6060

Month 3

11025

22050

10404

6120

Month 4

11533.333

23066.667

10605.333

6180

Month 5

12045.833

24091.667

10807.333

6240

Month 6

12558.333

25116.667

11009.333

6300

Month 7

13070.833

26141.667

11211.333

6360

Month 8

13583.333

27166.667

11413.333

6420

Month 9

14095.833

28191.667

11615.333

6480

Month 10

14608.333

29216.667

11817.333

6540

Month 11

15120.833

30241.667

12019.333

6600

Month 12

15633.333

31266.667

12221.333

6660

 monthly sales forecast

McDonalds in the monthly sales forecast has forecasted that the sales growth for the four major categories of items sold in the UK stores namely the Burgers, the chicken strips, the breakfast sandwiches and the Mc veggies (Wood, 2010). For the purpose of sales forecast, the management has forecasted around 5% monthly growth in the sales of Burgers. Further, in case of chicken strips the monthly sales forecast is around 5%. The Breakfast Sandwiches are also estimated to grow at a monthly rate of 2%. However, in case of McVeggies the company has kept the rate low because of the low number of vegetarian population of UK. The percentage is assumed 1% (Marchegiani and Phau, 2011).

The management has kept the growth rates at a lower level in order to make the growth rate acceptable. Moreover, the high sales forecast may be risky if a sudden fluctuation occurs in the taste and preference of the customers. Apart from that, high temperature rise during the end of December may also reduce the footfall of the customers and turn the sales downward (Kotler and Keller, 2012).

 

Expense forecast

The total forecasted expense for McDonalds is fluctuating depending on the changes in the rates of expenses. The above figure shows the monthly sales forecast for the first year that i.e. £ 46,000 keeping in mind the BEP sales. However the yearly sales is forecasted to growth at 10% and hence the three year revenue is shown in the following table. The expenses are estimated to increase by 100 to 1000 depending upon the nature of the expenses.

Profit and loss statement for McDonalds

   

Particulars

Year 1 (£)

Year 2 (£)

 Year 3 (£)

Revenue

46000

50600

55660

Expenses

     

Salaries and wages

1000

1500

2000

Food Expenses

1500

1700

1900

Utilities and kitchen expenses

500

600

700

Rent and lease costs

1000

2000

3000

Depreciation and amortization

800

1000

1200

Marketing and advertising

1500

2000

2500

Direct operating expenses

2000

2500

3000

Repairs and maintenance

900

1100

1300

Administrative expenses

1500

2500

3500

Furniture and fittings costs

3000

3500

4000

Delivery expenses

1000

1100

1200

Light and electricity

800

900

1000

Total expenses

15500

20400

25300

Profit

30500

30200

30360

 

In this case, the larger portion of the marketing expense will be spent for the advertising, direct operation expenses and administrative expenses. In year 1, McDonalds is planning to spent 66% of the revenue for the expenses. In year 2 the percentage will become 59% and in year 3 the percentage will be 54%. Hence, the company is planning to gradually decrease the percentage of expenses (Jay and Sealey, 2012).

 

Controls

Implementation milestones

During the initial starting of the McDonald store in UK, the owners need to set a plan displaying the time horizon and the cost involved in achievement and completion of each milestone related to the opening of the store. The following chart shows the milestones and their completion time along with the estimated costs (Hiebing, Cooper and Wehrenberg, 2012).

Milestone

Start date

End date

Budget (£)

Manager

 Department

Presentation preparation given to stakeholders

Year 1- 1st month

Year 1 – 3rd month

5000

Mr. C

Business development and administration department

Contact suppliers

Year 1 – 3rd month

Year 1 – 4th month

2000

Mr. S and Mr. B

Supply chain management department

Contact developers

Year 1 – 5th month

Year 1 – 6th month

2000

Mr. S and Mr. B

SCM department

Advertising and promotional strategies implementation

Year 1 – 6th month

Year 1 – 8th month

5000

Mr. X

Marketing department

Store constitution starting

Year 1 – 9th month

Year 1 – 12th month

25000

Mr. S and Mr. B and Mr. X

Marketing and SCM department

Store decoration and material resourcing

Year 2 – 1st month

Year 2 – 3rd month

28000

Mr. S and Mr. B and other companies

External Designer companies and SCM department

Staff recruitment and training

Year 2 – 4th month

Year 1 – 6th month

22000

Mr. A

Human Resource department

Final commencement of store operations

Year 1 – 6th month

Year 1 – 7th month

30000

Mr. C

Business development and Administration

 

 

Marketing organization

The company will use a marketing plan and programs in order to promote the new store in UK. The three major promotional tactics will include word of mouth marketing, in store marketing and local media marketing (Chang, 2011). Firstly, in order to increase the awareness about the presence of the stores in the locality McDonalds will use word of mouth promotion. The first time visitors will be given brochures and menu charts so that they can inform the other about the store. The local media marketing will involve local hoardings at clubs, pamphlets about the store along with local newspapers (Bradford, Erickson and McDonald, 2012).

McDonalds will follow the following personnel plan within the new store settings:

Personnel requirements

Roles and responsibilities

Expense (Only year 1) (£)

Site managers

At the time of store constructions will supervise and direct the store interiors and exteriors

25000

Store manager

Manage the administration within the store

15000

Kitchen staffs (Chefs and assistant chefs)

Manage the kitchen functions

23000

Waiters

Serve the guests

 1500

Cashier

Manage the cash at the front desk

1000

 

Contingency Plan

Although McDonalds have made the business plan after judging all the viabilities however the company also needs to make various contingency plans in order to prevent huge financial loss at the time of any emergency unforeseen loss. In case of the analyzed threats namely intense competition, wage and compliance cost giving rise to labor unrest and negative publicity by media, McDonalds will try to introduce low pricing strategy in the new store. The company is also keeping a contingent plan of introducing a organic item within the menu so that the negative publicity can be avoided (Bly, 2010).

 

References

Bly, R. (2010). The Marketing Plan Handbook. New York: Entrepreneur Press.

Bradford, E., Erickson, S. and McDonald, M. (2012). Marketing Navigation. Oxford: Goodfellow Publishers Ltd.

Chang, J. (2011). Conceptualising the value of web content in marketing research. Mrkting Intelligence & Plan, 29(7), pp.687-696.

Hiebing, R., Cooper, S. and Wehrenberg, S. (2012). The successful marketing plan. New York: McGraw-Hill.

Jay, R. and Sealey, J. (2012). Successful marketing plans in a week. London: Hodder Education.

Kotler, P. and Keller, K. (2012). Marketing management. Upper Saddle River, N.J.: Prentice Hall.

Marchegiani, C. and Phau, I. (2011). The value of historical nostalgia for marketing management.Mrkting Intelligence & Plan, 29(2), pp.108-122.

McDonald, M. and Morris, P. (2012). Marketing plans. Chichester, U.K.: Wiley.

McKinney, A. (2012). Real business plans & marketing tools. Fayetteville, NC: PREP Pub.

Ogilvie, J. and Laurens, A. (2009). Financial Strategy. Burlington: Elsevier.

Sorger, S. (2012). Marketing planning. Boston: Pearson.

Wood, M. (2010). The marketing plan handbook. Harlow: Pearson Education.

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