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The Approaches of McDonalds and Volkswagen to New Product Development

Most large multinational firms started with innovations that were done to react to the needs of people. This has also been the reason why firms succeed and grow while others fail. Similarly, the success of a new product depends on the extent to which they respond to consumers' needs. They have successfully developed new products and improved their features to thrive in today's stiff competition. McDonald's and Volkswagen have successfully developed many products that have been widely accepted in the market.

Traditionally, many families had a habit of preparing their own food in their places. With industrialization, fast foods became commonly accepted among many people. There was a need to have fast foods in many urban areas for people working in factories and offices. Firms like McDonald's were created to respond to this need. They came up with menus of fast foods, most of which were readily accepted. This has been the reason for success of this large multinational company.

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In the beginning of 19th century Daimler converted his horse carriage into an automobile by fitting it with an engine. This was a great breakthrough at that time, which led to the development of vehicles such as Mercedes Benz. This new invention and the subsequent innovation were readily accepted by rich people of that time, as cars were seen as toys for the rich (Wimmer 2011). However, they were later seen as a mode of transport for the public. During this time, there was a serious need for the development of cheaper vehicles to be used by the public. Firms that pioneered in producing these cheaper units included Ford (in the US) and Volkswagen (in Europe). The innovation, which was done to lower the cost of production, included mass production, which lowered per unit cost.

Since the inception of these two firms, they have had a distinct approach to the development of new products. This has led to an increased acceptability of their products and hence continued growth and profitability. Volkswagen has kept the consumers and the community around in mind. Their strategic goal s is based on consumers' needs. The goal of this firm is the development of sustainable products. They have also taken responsibility for their actions in matters regarding environment. This has been demonstrated in the production of their units.

The development of any new product in Volkswagen begins with the acquisition of a new idea. The ideas for developing new products or improving the existing ones are obtained from various sources. This firm conducts research and engages its staff in activities that they can generate new ideas from. This source of getting ideas is seen as internal. Sometimes, this firm also gets ideas from external sources, for example the light emitting diodes technology (LED lights). The firm, which was initially searching for energy efficient light sources for various gauges and indicators, ended up being a global manufacturer in this area. The inclusion of such cutting edge technology made their vehicles more energy efficient and hence acceptable for environmentally-conscious consumers. Similarly, external ideas have been sorted to add specific features to the products, including the sourcing of shock absorbers. The technology of magnetic shock absorbers, which comes from the US, was meant to increase the comfort level of the vehicles and hence make them more appealing to the buyers (Spurlock 2005).


With the guiding principles of sustainability and responsibility, the ideas obtained through the means described above are carefully screened in order to identify the best one. The best idea is selected on the basis of its ability to attain the set objectives of sustainability. Various criteria are used for this screening. The ideas adopted are the most competitive in terms or resources consumption and the ability to appeal to consumers. For instance, Volkswagen has carried out many researches to determine the shapes for their vehicles. The shape is very important, as it influences stability, handling, speed, and fuel economy. They settle for the shape that optimizes all the above.

McDonald's has for a long time searched for ideas to come up with innovative products for the market. Initially, their ideas were based on American and some European recipes. Later, this proved inadequate to cater for the growing needs of clients in many countries. This led to further research aimed at finding more ideas. A good example of this was when they resolved to incorporate host nations' flavors into their recipes.

The ideas that these firms come up with are not incorporated or utilized in their raw form. They undertake steps aimed at developing their concept from the newly acquired ideas. This involves evaluation of whether the idea can be developed into a product. They also seek to find whether these new ideas can be used to improve the existing products or develop some features aimed at making the existing products more appealing to buyers.

After the concept is developed, these firms embark on a massive exercise to inform the consumers of the new products to be made or the new features to be incorporated in their product. They also come up with a strategy of introducing their new products to the market. This involves classifying the market where the products are meant for. For instance, it is common for the Volkswagen advertisements to specify that their sport utility vehicles are meant for vast countries. They also advertise their sedan and beetle shapes to be preferential for the countries that lack geographical vastness, such as Japan and Denmark. Defining the market can also be done based on the placement of sale outlets. Many outlets for McDonald's foods are located in the US, and that means that many units can be sold in this geographical area. Other steps involved include pricing etc., which make a long-term marketing strategy.

After the markets are informed of the new product or the new feature of the existing product, these companies engage in a serious business analysis. This includes the consideration of such aspects as costs, sales, and projections made on the expected profit. Innovations such as inclusion of intelligent lights in brands such as Skoda called for the above analysis. This is done in order to take measures to accelerate the rate of return on investment. Similar move was done by McDonald's when they started operating in Germany. They had to evaluate whether the production of some German recipes was profitable.

This is followed by the production of the new product; this phase is referred to as product development and is followed by test marketing. The latter includes the introduction of the marketing plan in a real market set up. It is crucial, as the firm's marketing department becomes aware of the real situation in the market. This precedes the actual introduction of the product or its feature to the market (Temporal 2000).

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The marketers in Volkswagen are usually very responsive to the feedback received on this stage. They make quick changes of the final marketing strategy, which is crucial in ensuring profitability. However, in most cases, the engineering and the production work has already been done to the units produced. The range of changes that can be done to the product on this stage is very limited.

This is, however, very different with McDonald's, as many changes between the last phases can be done here. The consumers' response to the changes of the products or their features is very fast; for instance, if the consumers are not satisfied with the food served, the waiters or the sellers can make slight alterations in the service or the food served. It is also easier to alter the food prepared according to the consumer's specifications. One common characteristic that these two firms share is that the product's features are tailored to make it appealing and acceptable to the consumers.

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In conclusion, Volkswagen and MacDonald's understand that changes done due to technological breakthroughs have to be adjusted to consumers' needs. As seen earlier, these two companies are market oriented in their production and marketing strategies. They incorporate technological advancements that have a potential of improving the lives of the customers. Additionally, they also design product details and features in a way that is appealing to the potential buyers. The most important step they undertake involves market testing, where they inform buyers of the new features and products with a view of responding to their specification. This has worked to make their products more acceptable to the buyers and thus, more profitable.

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