Positioning Strategy: McDonalds
The difference in positioning of McDonalds and its Competitors
McDonalds is able to position itself strategically in the market through cost leadership. Many companies exist in the fast food industry, such as Burger King and Wendy’s. However, McDonalds is able to set an affordable price for its burgers and other fast foods. Cost leadership attracts more customers and thus the company is able to make more money. The prices set do not go too low because this would lead to company losses, but they are set lower than all its competitors (Ries & Trout 2006).
Product differentiation- at McDonalds they are able to offer burgers that are tastier and low fat. These qualities make their burgers and fast foods superior but at the same price or lower price than Wendy`s fast foods. Consumers when offered two products at a similar price but different qualities, they tend to prefer the product with a higher quality. The quality of McDonald’s fast food makes it attract more customers than its competitors (Ries & Trout 2006).
The company focuses mainly on burgers. In the fast food market, McDonalds has identified this specific segment. Choosing a specific segment makes it easier for the company to specialize and offer high quality burgers. Its competitors offer a variety of fast foods, for example Wendy`s offers fried chicken, burgers and fries (Ries & Trout 2006). Lack of specialization or focus on a single product leads such companies to producing low quality commodities.
McDonalds uses cost, Product differentiation and market segmenting to position itself ahead of its competitors. By doing this they are able to provide high quality products at an affordable price and cover a specific market segment (Ries & Trout 2006).
Ries, A., & Trout, J. (2006). Marketing warfare (20th anniversary ed.). New York: McGraw-Hill.