How to grow a potentially huge market

How to grow a potentially huge market

First published: 13/07/2010

If you’re passionate about improving your marketing I suggest you write and send a thank you note to the CEOs and marketing guys at McDonald’s and Weight Watchers. And if you’re in the food business you might want to add a gift basket to that thank you note. Why? They recently presented you with some wonderful strategy and marketing lessons you can learn and benefit from. Let me explain.

mcdonalds

As you probably know, recently Weight Watchers and McDonald’s announced their partnership which now has the Weight Watchers logo added onto several of the McDonald’s menu items – essentially credentializing a new category I call diet fast food. The target segment? Individuals who are conscious their weight, and so are reluctant to eat at a McDonald’s or any other fast food outlet for that matter.

In a nutshell this new partnership means that any weight-conscious person can now walk into a McDonald’s and – provided they order one of the approved meal items – eat guilt-free. A very smart move indeed as it provides better access to this target segment. The reason why I suggest you write a thank you note is because these firms have provided an important case in two important areas:

  • Market segmentation and the emergence of a new category
  • Co-branding

With regards to market segmentation, the graphic below gives a visual picture of what McDonald’s has done. Essentially it has identified the weight-conscious consumer as an ideal target and has re-aligned its product range to best meet the needs of that target with the offer of diet fast food. At present this category, to use a marketing term, has lots of empty space. That is, it is not overly competitive, so opportunities abound.

fast food category

In terms of co-branding, the partnership between McDonald and Weight Watchers credentializes the company’s marketing efforts, thereby making it easier for the consumer to believe that “yes”, you can eat healthily at McDonald’s. (Conveniently there’s nothing in the company’s promotions about the quality of the calories you’re eating when you’re chowing down on a chicken McNugget or a fillet o’ fish burger, but that’s a whole different topic altogether).

Anyway, the lessons learned related to segmentation and credentalization are important. Interestingly, until now fast food operators have, in my view, haphazardly catered to the weight conscious consumer – except for Subway, which has always positioned itself as a healthy alternative. (I personally don’t even see Subway as an out-and-out fast food outlet).

So the new Weight Watchers-McDonald’s partnership tidies the market up and establishes clearer path as to how best to cater to it. What it has also done is provide all sorts of opportunities for fast food operators generally, as well as cafe operators, caterers, restaurants and the like.

Take the likes of KFC, Wendy’s and Burger King. If they aren’t doing it now they need to be thinking about how they can better cater to the market segment that McDonald’s is now attracting. It may mean coming up with new menu items or better delineating their existing menus to cater to weight-conscious individuals. For instance:

  • Diet Pizza
  • Diet KFC
  • Diet Wendy’s
  • Diet Burger King

The same guidelines can apply to even cafes etc. Huge potential for the likes of Starbucks etc in my view. Weight Watchers and McDonald’s have done fast food operators etc a huge favour.

Now listen up.  Even if you’re not in the food industry there are some very important lessons for you too.  Fact is, these principles of market segmentation, co-branding and credentializing can be applied to any business looking to grow.  All it takes is a bit of strategic thinking and creativity to figure out how you can adapt them to your situation.