effort to reduce costs and gain access to
towns that were previously dismissed because
of their inability to generate sufficient sales to
sustain a full-size outlet. McDonald’s new
prototype, called the “Series 2000,” was 50
percent smaller and cost 30 percent less to
build. These units seat 50 patrons and
employ only 20 persons per shift.
McDonald’s traditional units seat twice as
many customers and require, at a minimum,
40 employees per shift. These downsized
units not only allowed the chain to enter
small towns, but also allowed the company
to secure locations in congested markets that
were previously inaccessible because of the
limited size of available sites.
Value Menus.Fast-food restaurants have
also explored a variety of strategies to attract
customers during hard economic times. In an
attempt to compete for the consumer’s dol-
lar, Red Lobster, a dinner house, launched a
value menu that boasts numerous entrées for
less than $10. In addition, the chain upgrad-
ed its china, uniforms, and napkins to
enhance its image of providing the customer
with value. Although fast-food restaurants
must proceed cautiously to ensure that the
customer’s need for quick service is satisfied,
many fast-food restaurants are also opting for
expanded menus to attract customers.
McDonald’s has also unveiled new menu
selections designed to boost sales. Of partic-
ular concern to Rubio’s is the addition of two
Mexican items, the breakfast burrito and the
chicken fajita. McDonald’s is also testing
turkey and pizza as other menu options.
McDonald’s U.S. president, Ed Rensi, does
not anticipate that the addition of these new
products will dilute the company’s concept of
serving hot fast food in a pleasant environ-
ment at a low cost. In fact, new technology
should enable McDonald’s to broaden its
menu while maintaining good service times.
Other fast-food restaurants have responded
to this threat by promoting time-intensive
products on a limited basis only.
Taco Bell, the nation’s leading Mexican
fast-food restaurant, is credited with having
started these discount wars with the addition
of its 59-cent and 39-cent value menu items.
As operating profits for the third quarter of
1991 decreased, analysts wondered whether
Taco Bell’s value menu had discounted the
chain out of a profit margin. However, ac-
cording to Taco Bell president John Martin,
the chain will not need to raise prices for at
least five years because of its systemic re-
structuring and cost-saving technological
changes in operational methods.Marketing Strategies. Restaurants have
also explored other marketing strategies in an
attempt to attract customers. Burger King
developed a Kids Club to capitalize on the
power of children to influence the purchases
of their parents. Burger King entices its 2.7
million members with six newsletters “writ-
ten” by well-known cartoon characters. The
members also receive iron-on T-shirt logos
and activity booklets. Burger King analysts
credit the club for a recognizable increase in
the chain’s business. Burger King is also
investigating other marketing alternatives to
increase consumer spending. To further reach
its teenage market, Burger King bought time
on Channel One, a satellite service that
beams 12 minutes of programming and com-
mercials each day into school classrooms. It
is believed that a 30-second commercial on
Channel One reaches 40 percent more teens
than a commercial on MTV. Finally, Burger
King is spending a portion of its advertising
budget on local tie-ins to help build traffic at
its franchises.Delivery Service. Fast-food restaurants such
as Burger King are also attempting to prod
the dinner crowd, which would ordinarily
select a midrange restaurant, by offering lim-
ited table service during the dinner hour.
Customers place their orders at a walk-up
counter, serve themselves a drink, and select
a seat. When ready, their order is served to
them at their table. Although Burger King
does not intend to raise its prices as a result
of this new service, the effects remain to be
seen.
Acknowledging that the 1990s were a
decade dedicated to convenience, pizza restau-Rubio’s: Home of the Fish Taco (A) 447