Marketing Management – 1

Assignment 1
Comparative Response Strategies

Submitted To : Dr. Himanshu Chauhan

Submitted By : Rumaa Mitra (201144)

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Problem statement
Refer the article, ‘Rejuvenating the Marketing Mix’ by Bensen P. Shapiro, and the Exhibit II, given
in the form of a matrix (P, Q, A x P, Q, A). Find an analogical strategy which might have been used
by a company with reference to the matrix.
Competitive Response matrix -

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Approach
The competitive response matrix contains 9 entries, each one depicting how companies compete
with each other by establishing on different elements of the marketing mix.
An example for each instance has been provided. All the organizations considered here belong to
the Fast-food & Specialty coffee chains industry. The explanation for each example is basically
divided into 3 components –
a) The Products/Brands/Brand strategies in consideration
b) 1st paragraph explains the action-reaction strategies of the competitors
c) 2nd paragraph, in continuation explains the result of their actions

A list of reference links is provided after each example, with descriptive anchor text.

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 Cpp
The Competition of “Value Menu”

Wendy’s ‘99₵ menu’ Burger King ‘Value menu’ McDonald’s ‘Dollar menu’

V/S V/S

Commonly seen in restaurants today, the value meal theory is a tactic used for up-selling and bundling. In the late
1980s, the market share battle became so intense that the hamburger chains started going after each other by
heavily discounting or couponing their flagship programs. The standalone prices went as low as 99 cents. Wendy’s
risked to opt out of the discount war by creating a whole menu with 99 cent items under a meal offer, rather than
selling their big products alone at such low price. It became the first fast-food chain to endorse the value meal
system by creating a 99¢ menu in 1989, where all items listed on it were priced exclusively at 99¢. However, the
concept of a permanent, separate menu at a cheaper price gained momentum when Burger King launched its value
menu in 1998. Not to stay behind in the race, after a lot of experiments McDonald’s launched its own Dollar menu
in the market in 2003.

The take on value meal was certainly a hit for the fast food restaurants as it stood the test of time. It was
replicated, remodeled and re-innovated throughout the years, given changing market conditions. For instance,
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confronting cost pressures because of increasing expense of meat, cheddar and different fixings, Wendy’s later
revamped its 99¢ menu to “Right Price Right Size menu”. It was expected on giving price-sensitive consumers
more choices, while giving Wendy's greater adaptability on pricing. Similarly, McDonald's and Burger King moved
beyond the $1 price-point, offering layered or tiered value menus. Example: Burger King’s King Deal value menu,
McDonald’s Dollar Menu & More or 1$ 2$ 3$ Dollar Menu.

References:
Value menu evolution Reference Link

Wendy's value menu Reference link

A war between McDonald's, Burger King and Wendy's Reference Link

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 Cpq

McDonald’s/Dominos (Major players) Burger Singh

V/S

Major players in the Indian fast food industry like McDonald’s and Domino’s have captured a huge part of the
market share by implementing a combination of effective pricing strategies. Example: McDonald’s uses Bundle and
Psychological Pricing strategy to maximize profit margins and sales. Domino’s uses barbell pricing strategy to
balance demand by offering both cheap and premium pricing. To compete with these players with strong
operational history, the relatively new Burger Singh known famously for their fusion style shifted their focus on
improving the quality of their services. It mainly targeted Tier-2 & Tier-3 cities (markets with demand but absence
of the international brands) with a focus on providing distinctive yet consistent high quality products/service and
improve consumer experience. To achieve the set goal, they standardized supply chain, operating systems, and
day-to-day processes. They use their own bread and sausage to keep quality standards in check. The company
invested heavily in employee training, skill acquiring and set strict hygiene standards for employees.

Operational since 2014, Burger Singh’s revenue in FY 2016-17 was Rs6.5 crores which showed a growth of 37%.
The Quick service restaurant chain has grown steadily since then and has reported a revenue of R 26 crore in the
financial year of 2019.

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Reference:
India's Burger Singh takes on McDonald's Domino's Reference link

Burger Singh Kabir Jeet Singh Reference Link

McDonald’s marketing mix 4P’s analysis Reference link http://panmore.com/mcdonalds-marketing-mix-4ps-

analysis#:~:text=In%20the%20bundle%20pricing%20strategy,optimize%20cost%20and%20product%20value.

Marketing mix of Domino’s pizza Reference Link http://shahedurrahman6.blogspot.com/2019/07/marketing-mix-of-

Domino-pizza.html#:~:text=Pricing%20of%20Domino's%20pizza,both%20cheap%20and%20premium%20pricing.

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 Cpa
Wendy’s value menu The ‘Burger King’ character

V/S

During the value menu war, Burger King was actively participating in the price restructuring and bundling as it
introduced its own 99₵ value menu in response to Wendy’s own of the similar name. To differentiate itself in the
market from other contenders, Burger King also upped its advertising game. Shortly after its acquisition by TPG
Capital in 2002, the organization reinstituted its ‘Have it your way’ adage and drew in Crispin Porter + Bogusky
(an advertising agency known for having a hip, defiant tack when creating campaigns for its customer). The
agency changed BK’s marketing strategy and refreshed its image as modern, engaging and culturally aware. An
advertising campaign focused on product tie-ins, television spots, web and print was created. Bringing into play
the act of viral marketing, it reinstated the ‘Burger King character’ (first introduced in between late 1960s to early
1970s), which generated a significant word of mouth.

BK supported the designation and the marketing agency used the persona in its promotions. However, this
iteration of the King failed to give a consistent message regarding the organization and its products, inciting the
company to end its relationship with Crispin Porter+Bogusky against the acquisition of Burger King by 3G Capital.

Reference: Burger King advertising Reference Link | 'The Burger King' character Reference Link

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 Cqq
Trend change from traditional Fast food to ‘Fast Casual’

Chipotle Taco Bell Cantina

V/S

In the early 2010s, when the fast food chains where slashing prices, Chipotle went the opposite direction & started
a trend of “fast casual” – defined as limited-service concept focused on higher quality food, services and more
upscale dining environment with higher price-points than quick service restaurants. They characterized an
alternate value equation for fast food by moving onto top quality ingredients, fresh preparations and a dining
experience several scores above fast-food Formica counters and fluorescent lighting. Their quality claim became
evident as Chipotle became the biggest purchaser of higher-priced meat of animals that have been naturally fed
and humanely raised rather than the factory-farming system, which provided with cheap meat to the remainder of
the food industry. Customers noticed & were willing to pay extra for the distinctive flavor from organic meat and
fresh vegetables grown “with integrity”. Following Chipotle’s heed, Taco Bell launched its Cantina concept in 2016
which incorporated a bar, VIP lounges, retail experience, event spaces, DJ amusement etc. It was a significant shift

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for the company towards quality of customer experience from its traditional fast food concept that dates back to
1962.

By directly challenging all the dominant trends in its industry, Chipotle got the industry innovator’s advantage
and became a market leader in quality serving forcing the $800 billion restaurant industry (specifically QSR’s) to
step up their game in its image. The “Cantina Bell” saw success as its quality perception among the consumer’s
rose. Taco Bell couldn’t beat Chipotle to be no.1 but scored the closest market share to its foe.

Reference:
How Chipotle changed America's fast-food industry forever Reference Link

From fast to fancy. QSR's upscale to compete with fast-casual Reference link

Taco Bell sees quality perception rise through Cantina Reference Link

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 Cqa
McDonald’s specialty coffee Starbucks’ ‘My Starbucks idea’

V/S

McDonald’s has consistently been the market leader for its cheap and wide-range offerings. As Starbuck invaded
its dominion with the launch of breakfast sandwiches and drive-through windows, McDonald’s began taste testing
its specialty coffee line in 2005 with the goal of providing premium quality coffee at affordable rates (to directly
compete with specialty coffee chains’ high-quality-high-price products). In 2007, the company succeeded as its
coffee was rated better tasting than Starbucks’ by Consumer Reports magazine. Receiving positive public
feedback, its Premium Roast Coffee was declared the “cheapest and the best”, with quality and taste both being
better than Starbucks. During the economic slowdown of 2008, Starbucks took a hit as customers switched to
cheaper options. It was forced to shut 600 shops. Profits fell by 28 % compared to 2007. Another 300 stores
closed and 6,700 employees laid off. Taking advantage of its sluggish sales, McDonald’s Corp. released its McCafe
line of espresso drinks (affordable but quality everyday coffee). The major roll out was supported with extended

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drive-through hours and free Wi-Fi Internet access, with the objective of not only bringing in more customers, but
also getting them to stay longer (improved customer service quality->improved customer experience) and
consume more.

After the crisis, Starbucks expected to restore its customer relationships and show the world that it cared about
quality and consistency. In 2008, Starbucks unfolded the "My Starbucks Idea" for customers to exchange ideas
with each other and also directly with the company. In excess of 93,000 ideas were shared by about 1.3 million
users via social media and page hits elevated to 5.5 million per month. Over 100 ideas were implemented by the
company. This activity helped the coffee chain build a robust fan base and reignite brand trust. Starbucks was able
to pull itself out of the financial meltdown and tackle competitors by lining-up its operations with customer
demands through social media. It has since then consistently maintained its social media-based marketing.

Reference:
Coffee wars Reference Link http://citeseerx.ist.psu.edu/viewdoc/download?doi=10.1.1.649.1307&rep=rep1&type=pdf

McDonalds recession strategy Reference Link

Starbucks survived the financial crisis Reference Link

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 Cqp

McDonald’s coffee Dunkin’ Donuts

V/S

(McDonald’s quality strategy around the time of recession is presented above, under the Cqa example. Page No 11)

To survive in market against the competitors’ innovative strategy during the Economic crisis of 2008-09, Dunkin’
Donut anchored on heavy price restructuring combined with a recognition of changing consumer habits and
expectations. It responded to the on-the-go, busy life-styles and economic changes by collectively offering quick
and portable, but high quality espresso with simple breakfast menu at affordable rates. In expansion to this idea,
the all-day Oven-toasted menu was also launched which remodeled the rigid breakfast-only-in-the-morning
system.

The ‘simple menu’ (Simple. Hence, cheap) along with the bundling strategy and service flexibility according to
changing trends helped DD control the operation costs even with price-cuts.
Reference: Dunkin's new oven toasted menu Reference Link | Coffee wars Reference Link

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 Cap
McDonald’s McSpicy campaign(India) KFC Streetwise range(India)

V/S

In 2011, adapting to the Indian way McDonald's presented another item range in the Indian market called McSpicy
range. With the goal of promoting this as the flavor of the youth, a new advertising campaign called ‘How spicy is
my McSpicy?’ was propelled. From the prelaunch campaign 'The Great Spicy Speculation' went viral and
successfully reached 250,000 people. The company made extensive use of social networking sites and messengers
for this campaign. Apart from that other technological innovations like LED hoardings and virals on the internet
were used for the final campaign to reach the target segment. Following, KFC in 2012 expanded its value range by
launching new products in the Streetwise range. Maintained at starting price of Rs.25, this was targeted at college
goers/youth who seek ambient hangout places at comparable prices to canteens.

Both McDonald’s and KFC aimed at presenting themselves as a youthful brand. But the former received mixed
reactions to its new campaign. It met the tastes and preferences match for some, while for others the McSpicy
menu and the core message of the campaign were disconnected. KFC received fantastic response from its
consumers and positioned itself as the hangout place of the youth population. Their share with teens grew by 20%
after their first launch.

Reference: Case Study Reference Link | KFC Streetwise Reference Link | McDonalds & KFC Reference Link

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 Caq
Dunkin’ Donut Starbucks

V/S

In the early 2000s, Dunkin’ Donuts decided to shift focus from donuts to coffee. In an effort of repositioning the
brand, a multi-million dollar advertising campaign called “America runs on Dunkin’” was launched. It
revolutionized the company’s brand position by focusing on how it helps busy Americans to keep going. It was a
fun campaign celebrating life and showcasing hard-working Americans embracing their work. The campaign
stressed on the company's primary mission to provide a full range of quality products at affordable price range
and that are served fast. DD has since invested been investing a huge sum in marketing and has delivered many
successful campaigns. In a bid to improve customer loyalty and quality of customer experience, Starbucks in its
later years has invested heavily in its physical locations by remodeling its restaurants, expanding its food options,
and revamping its rewards programs.

DD’s campaign had an emotional touch to it representing itself as an All-American brand and as famously evident,
helped Dunkin’ in reimaging itself. Its active social presence helps DD clearly communicate its value to the
customers. Considering the earnings, Starbucks’ efforts of a chic and upscale environment has been successful.

Reference: Dunkins repositioning ad campaign Reference Link | Coffee customer loyalty Reference Link | Starbucks
competitors Reference Link

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 Caa
Domino’s Pizza Hut

V/S

The start of the football season marks the most important sales period in the pizza-delivery game. In 2009
(Recession period), when Domino’s and Pizza Hut were in a head to head shootout, they used high level
advertising/media strategy to block and tackle each other. TV remained the largest battleground for both Pizza
Hut and Domino’s, accounting for about 92% and 94% of their paid media. Domino’s was more responsive and
tactical discussing recession through their ads while Pizza Hut promoted more about its quality and menu range.
Pizza Hut implemented a broad-ranging program and viral posts through social media platforms like YouTube,
Facebook and Twitter. Unlike PH that had accumulated a huge number of fans, Domino’s seemed to be directly
interacting more to customers.

Both firms almost tripled their online advertising investment in 2009. Domino's primarily promoted its delivery
service while pizza Hut appeared to target younger and female audience. Domino’s came out strong on natural
search, indicative of advertising effectiveness and a strong website experience. While Pizza Hut made it big on
paid search against both branded as well as unbranded words.

Reference: Pizza media strategy Reference Link

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