I.

Introduction

McDonald's was founded in 1940 in California. According to QSR Magazine,

McDonald's is one of the world's biggest fast food chains with 18,710 restaurants and is

located in 212 countries. The Mc Donald’s products is selling are hamburgers, chicken,

sauces, pork and other products. In 2014, the first MC Donald restaurants opened in Saigon,

Vietnam. However, MC seems to be struggling in the Vietnamese market because the

restaurant’s food is not as popular as Lotteria and KFC restaurants. This essay concentrates

on analyzing products and markets of Vietnam and offer solutions to help develop the market

successfully.

II. Products and services

From a family restaurant that serves very small food, McDonald’s has grown into a

system of fast-service shops worth billions of US dollars. When hamburgers and fries potato

remain the mainstay of McDonald's business, the ability to predict and meet customers' real

needs is their greatest success. The best example is the File-O-Fish sandwich, made by Lou

Groen, the owner of a branch restaurant in Cincinnati, which focuses most Christians. Groen

realized that his business was not doing well on Fridays - the day when Christians don't eat

meat dishes. Groen offers a fish sandwich, meeting the needs of the local people (Cain,

2018). This "File-O-Fish" sandwich was sold first in 1963 and quickly became a popular

menu item at all McDonald's stores around the world.

Then, in 1968, the Big Mac - McDonald's most successful sandwich made by Jim

Deligatti in Pittsburg. And 9 years later, also the same restaurant, they serve breakfast menu

for drivers. And this has changed the breakfast habits of millions of Americans.
1. Nature of the product

Innovation and creativity play an extremely important role in the growth of

McDonald's brand. The company has huge investments in technology and understands

customers' needs. McDonald's biggest breakthrough was the opening of the Sierra Vista

restaurant in 1975 where customers who bought food did not have to get off the car. The idea

came from the need to solve difficulties in sales in that area, when the nearby army base did

not allow military personnel to get off when wearing military uniforms. And this idea

succeeded immediately. Today, the business of McDonald's stores thanks to this idea

accounts for more than half of their business.

McDonald's serves customers with the best food quality. Raw materials for food

processing are ordered from suppliers for a long time. Food is prepared according to high and

consistent standards. McDonald's menus are always reviewed and improved to ensure that

customers' expectations are met.

On the menu of McDonald's restaurants in the United States, there are also beer,

chicken, fish, salads and vegetarian dishes, plus a range of desserts, hot and cold drinks with

various flavors.

McDonald’s is the first fast-food restaurant to openly list all ingredients and

nutritional value analyzes in detail for all their products. In 2000, McDonald's launched

several innovative products such as McSalad, Shaker and Fruit N’Yogurt Parfaits (Fruit

Yogurt Cream), which are easier to eat in busy times.

2. Competitors’ analysis
 Since 1997, the fast food market in Vietnam developed rapidly when Lotteria opened

its first store, Lotteria then expanded its store to 200 stores by 2019. In 2019, KFC opened 44

stores in Vietnam. and Jollibee has 100 stores. In Vietnam, McDonald’s has two biggest

competitors: KFC, Lotteria.

About KFC, they considered because there are many promotions, especially daily

promotions. Besides, new dishes / new drinks and specialty egg cakes are also things that make

customers consider to eat at KFC. However, chicken origin is a problem that some people are

afraid to choose to eat at KFC. In addition, the unhealthy food (chicken flavors, bad taste) and

lots of fat are factors that make customers come to eat but are not happy about KFC. In addition,

meals without KFC promotion are also rated as High-priced.

About Lotteria, promotions, gifts with meals, space, delivery service, ... are the factors

that make customers consider choosing Lotteria. Besides, many people also consider setting a

birthday party for their children here. However, poor service attitude is a big weakness of

Lotteria and many customers are annoyed with this problem. Some people say that they are loyal

customers of Lotteria but only after a few when encountering employees with poor service

attitude, they want to give up the brand. Others say that they have only visited a few times but

will never return to Lotteria because of this problem. It is worth mentioning that most negative

discussions about the service attitude are posted by customers. directly to Lotteria Facebook

fanpage, a fanpage with more than 600,000 followers. This is very dangerous for the brand. In

addition, Lotteria's Food cannot be highly priced, especially in terms of the unattractive

presentation that makes customers feel they are not respected.

About McDonald’s, being a relatively new brand in Vietnam with a very small store

system, McDonald's has opened a new store in areas where many people are excited because
they don't have to go far to eat anymore. On the other hand, although it is a very popular brand in

the world, but in Vietnam, McDonald's has many ideas about the food is not good, besides many

people also complain that McDonald's Menu is not diverse, mostly only burgers are not suitable

for Vietnamese tastes. In addition, some people also shared that they were not well served when

they came here to eat and the No delivery service is also a problem that makes unsatisfactory

customers about McDonald’s.

III. Market Environment: Analysis

In terms of total economic size, Vietnam is second only to China in terms of GDP per

capita growth over the past 10 years. The GDP per capita figures do not fully reflect the exact

living standards of the people, because the GDP figures are often different from the GNP,

especially in the context of globalization of capitalism, profits are accounted for. The country's

GDP may be included in other countries' GNP, and other causes. Specifically, according to the

World Bank's statistics, the GDP in 2014 was 186, 2 billion USD, while the GNI of 17, 9 billion

USD means that the money of Vietnamese people earns abroad less than the money earned by

foreigners. Vietnam, also means the amount of money earned in Vietnam (GDP) but foreigners

spend more on the opposite side.

Vietnam with more than 80 million people, of which 65% are young people under the

age of 35 and the speed of economic growth over the past 5 years (from 2005-2010) is an

extremely attractive market. For fast food corporations, some recent surveys in Vietnam show

that 70% of Vietnamese people have liked to eat at fast food outlets. At McDonald's, Lotteria,

KFC are 3 foreign brands that are operating fast food quite successfully in Vietnam with the

main dishes are fried chicken, burgers, chips and carbonated soft drinks. These shops attract

about 200-300 visitors per day on average and have locations with 400 to 1000 guests per day.
 Ages: Mc Donald’s is mainly aimed at young people aged 17 - 29, families with

children. Due to many reasons that Mc Donald's has chosen the market as young with the age

under 30. With the determination of the market, Mc Donald's mainly focuses on the dynamic

trend, fast access to culture of young Vietnamese. Male. In addition, McDonald's also pays

special attention to children, children will be the number 1 priority customer. It can be said that

they impact on their perceptions even when they are young.

IV. Company analysis

1. Demand and supply

To begin with, Vietnamese fast-food market is typical market, and is quite different with other

markets that McDonald’s has penetrated. Vietnamese fast-food market is a fierce competition

market that has a various suppliers and demands. In term of suppliers, through the decade from

2008 to 2018, Vietnamese Ministry of Industry and Trade has licensed nearly 150 foreign brands

to Vietnam. In particular, the restaurant sector accounted for the largest proportion, with more

than 43%, including more than 40 brands of fast food restaurants, cakes, and drinks (Thu, 2017).

Besides foreign fast-food brands, Vietnam also has many Vietnamese fast food brands with a

variety of speciality foods such as “Vietnamese bread”, “Pho” that are familiar with almost all of

citizens. On the other hand, KFC and Lotteria are two big brands that have almost captured the

market before McDonald’s joins in. According to Le (2017), up to now, KFC has more than 140

restaurants and Lotteria has more than 200 restaurants distributed to lots of provinces. In term of

demands, using fast food is not a habit of Vietnamese people, and they have a tendency of using

fast food a few times a month for gathering meal. According to Q&ME (2016), 71% of

respondents suppose that they like fast food, but there are 47% use fast food regularly. On the

other hand, nearly 90% of consumers choose KFC and LOTTERIA, and just about 80%
recognize the McDonald’s brand although it appears later in Vietnam (Q&ME, 2017). That thing

illustrates that it is difficult for McDonald’s to take a part in Vietnamese market.

2. Price analysis

It can be said that cheap prices is a very strong competitive advantage of Mcdonalds as well as

other fast food restaurants in most markets. However, in Vietnamese market, McDonald's price is

quite high compared to Vietnamese fast food restaurants, or even KFC or Lotteria. Although

McDonald's has policies to adjust prices to suit the Vietnamese market, it is still considered a

high price in this market. For example, a McDonald’s burger in US costs $4.6, but it costs only

$3.99 in Vietnam (Young Knowledge, 2014). In my opinion, it is totally cheaper, but it is still

more expensive than 0.75$ price of popular Vietnamese bread. However, McDonald's pricing

strategy also has some strong points to attract customers in Vietnam market. McDonald's pricing

strategy is a combination of combo prices (prices bundling) with "psychological" prices. In

combo prices, the company will sell meals and other product packages at a certain preferential

price. In the "psychological" price, McDonald's has very affordable prices, such as $ __. 99
instead of rounding it up. It can be said, that is one of the most important factors to encourage

customers to buy products (Le, 2017).

3. Product

McDonald's main product lines include: Hamburger and bread, chicken and fish, Salad, snacks,

drinks, desserts, McCafe. McDonald's is known primarily for its famous Burger product.

Therefore, the company has been constantly expanding the number of its products. Currently,

customers can buy chicken and fish, desserts or breakfast at McDonald's. The product factor in

McDonald's strategy shows that, if you want to attract new customers as well as retain regular

customers, companies need to make changes and refresh products or services regularly. On the

other hand, diversifying products also helps McDonald to reduce the cost. For example, a

material can make many dishes, and when they buy in large quantities, they can get discounts.

4. Distribution Channels

The places where you can easily buy McDonald's products are: restaurants, websites and finally

McDonald's mobile application. The restaurant is where most McDonald's sales are generated. In

addition, customers can order through website and mobile application. Moreover, the company's

mobile app for iOS and Android operating systems both offer customers special offers with the

location of the nearest McDonald's restaurant. Having multiple distribution channels is a factor

help McDonald’s to encourage customers to use their food by convenience.

V. Future Recommendation

1. Market Strategy
With the development of the fast food market, McDonald seem to be the latecomer. Before

McDonald, many brands such as Lotteria and KFC quite thoroughly exploited the market in

Vietnam. They had create their name as well as a position in the fast food market of Vietnam.

The awareness and actual use of some fast food brand in Vietnam

Besides, the market demand in Vietnam is not as good as the market in many other countries.
The eating habit of Vietnamese people are quite different from those of Europeans and

Americans. They care more about the food rather than the time.

However, According to Phuong Linh (2014), in Vietnam “the fast-food market boasts a

compounded annual growth rate of 17 per cent”. It means that with the development of the

society, McDonald still have chance to grow. The first recommendation for the future of

McDonald is to build up a market strategy including the marketing strategy, the operation

strategy, etc. The purpose of building the market strategy is to create a close system in order

to promoting as well as branding in Vietnam.

2. Menu change
The change in menu actually has been made for many years by many fast food brands

including McDonald. However, in other brands, the menu have change by season, by month

and even by day. KFC, for example, use the menu for marketing. They have the menu for the

anniversary day such as valentine, day of women, etc. From that, customer can get more

from that set in such a day in order to get more customers. The menu change is not the new

one but it is rated as quite effective.

3. Price change

In the fast food market of Vietnam, the price of McDonald comparing with other fast food

brand is not quite high. However, when comparing with the other meals, the fast food’s price

is a problem. In order to enjoy a lunch in McDonald, a customer have to pay about 100 to

200 thousand Vietnam dong. Meanwhile, with 30 to 50 thousand Vietnam dong, that person

can enjoy a fully meal with cooked rice, meat and vegetable. It has shown that a price change

can create more effect than what we expected.

4. Location change

In fact, the location of McDonald quite limitation. The restaurants mainly locate in

HoChiMinh city and only one restaurant in Hanoi. On the flip side, the other fast food brands

such as KFC have scattered all over this S-shape country. This situation has shown a

limitation of McDonald that is limited in exploiting locations compared to their competitors.

McDonald should think about expanding business locations in order to create the chain in

their business.

VI. Conclusion
Overall, for decades, McDonald's remains one of the leading fast food companies. On the

development of the fast food market particularly as well as food generally, McDonald still

has a position that is hard to change. In the Vietnamese market, McDonald's may encounter

both success as well as difficulties. However, some small change can help McDonald not

only stand firm but also grow stronger in this S-shaped country. Moreover, along with the

change in the life-style of Vietnamese people, it will create various of potential and

McDonald's can succeed if they can seize the opportunity.

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