McDonald's has been able to develop products which cater to both the segments. However, it is also critical to understand that most of the UK's population is now ageing with least preferences for eating food like that of offered by McDonald's due to obvious health reasons therefore Targeted segmentation may be going to change for McDonald's. UK's population is expected to grow by 8% by 2016 however, the total proportion of pensioners i.e. old age population would increase therefore there may be a shift in the overall demographics of the country. (The Times 100)
It is also critical to note that the market segmentation of the firm is largely generic in nature as it attempts to capture almost every consumer in the market by offering them food products which fit into their life styles according to different criterion such as income, taste, preferences, excitement etc.
The purchase behavior is largely dominated by the increasing health consciousness of the consumers as they value health over the taste. This change in the psychographics of the consumers suggests that the trends are shifting towards consumers who prefer to have healthy food which not only fulfills their taste buds but also provide them necessary nutrition for maintaining an optimum level of health. Further, since the incidences of obesity are on rise in children too therefore there is also a general shift in the buying behaviors of the parents as due to health consciousness and improved health related education; parents prefer to have healthy food for their children.
There are two basis of competition in this industry i.e. the demographics as well as the personal income of the individuals. The competitive landscape in this segment of the market is therefore driven by the effective marketing and efficient operations.
The following graph suggests the output growth level of the food services industry in next few years. The growth rates are more or less constant during next five years indicating that the industry may be heading towards its maturity stage.1
There are two close competitors of McDonald's in terms of size and presence in the market. KFC and Burger King Offer similar products offered by McDonald's with little or no differentiation in terms of quality. However, McDonald's has largest market share followed by KFC. This traditional superiority of McDonald's has been due to its competitive advantage it gained over the period of time.
KFC has traditional lead in Chicken market where it offers products based on its unique and somewhat secret chicken recipe based on 11 herbs and spices whereas Burger King has the advantage in producing products which are considered as healthy. As such both the competitors are offering products which serve a particular niche market and focus on delivering value through the quality products i.e. products which are