STRATEGIC MANAGEMENT McDonald Arch deluxe

Present to:

Dr. Arsalan Ghouri

Present by:

Sidra Najam &

Shaikh Zeeshan Ali

THINK FOR A MOMENT HOW IT WOULD BE

LIKE IF ????

If Cerelac start selling product for adult ?

Johnson & Johansson start selling product for adult?

You must think twice before buying their product ??? Isn't it???..........

Same thing happened with McDonald's Arch Deluxe

Background about McDonald's Arch Deluxe• The Arch Deluxe was a hamburger sold

by McDonald's in 1996 and marketed specifically to adults. It was taken off from the menu about one year later.

• Despite a massive marketing campaign and now is considered one of the most expensive flops of all time.

• "Royal Deluxe" is the naming of this product in France and Russia. It is still available there.

• Year 1 Arch Deluxe Created Loss - $262MTotal Arch Deluxe Program Loss - $462M Financial

Graphs Impact on Brand Equity

McDonald's Arch Deluxe included: a quarter pound of beef on a split-top potato flour sesame seed bun topped with a circular piece of peppered bacon, leaf lettuce, tomato, American cheese, onions, ketchup, and a "secret" mustard and mayonnaise sauce…

Arch Deluxe’s launch, McDonald’s capitalize on the popularity dance step instaed of doing proper market survey wasted 300 million on it.McDonald's encourage its employees from all around for “Do the Deluxe’ lessons .While you may not be able to purchase an Arch Deluxe anymore, you can still keep the spirit of this marketing .

COMPETITORS

Reasons of Failure

Inappropriate Marketing Mix

Product• Positioned as “sophisticated” product meant for adults• McDonalds was known for its convenience and simplicity, not

sophistication• Very high calories content (fat contents: 32 grams)

Price• Too high for burger at the time ($2.29)

Promotion • Advertisements where kids (their top customers) were shown

shunning the product (calling it ‘yucky) and saying they don’t understanding it.

• The mascot Ronald was dropped for initial camping

RECOMMENDATION• Think before action “Thorough understanding about segment being targeted”

• Price must be with in range of people

• Avoid customer confusion: McDonald’s brand identity is simplicity Product,don’t bombarded with variations as nobody goes to McDonald’s for sophistication, they go for convenience

• They should not upset their core segment which was profitable for them( child-friendly approach)

• As they always promote family-friendly atmosphere they must avoid Advertisement contradicted the family-friendly atmosphere that McDonald's had for so long .

• Proper market survey / testing should be done before launch

Recommendations Keep the menu simple McDonald's should be a fun place for families and a place for those on the goConsistency is key!

THANK YOU