Reference no: EM133217325

McDonald's at Punchbowl, a south-western suburb of Sydney, is the first McDonald's restaurant in Australia to sell halal burgers and other foods. When Tony and Mina Favotto bought the McDonald's Punchbowl store in 2001, they received 30-40 calls a week from Muslim people wanting to know if the store was halal. In light of being situated in a multi-cultural community where 10 percent of residents were Muslim, Tony Favotto (of Italian origin) and his wife (of Greek origin) felt they had a commitment to the local community, and they thought that it was a viable business option to offer Halal food to that community. The Favottos had full support from McDonald's head office in Australia. To have McDonald's Punchbowl certified as halal, the restaurant undertook a range of changes to adhere to government regulations. Meat patties are now sourced from a halal supplier in Queenstown and the cost is approximately 10% more than the regular meat patties. Other suppliers, such as Coca Cola, are verified as halal. New food handling procedures have been established and cooking equipment has now been installed to ensure there is no mixing of halal and haram (non-halal) products. The one-off cost of the equipment was approximately $4000AUD. Staff were trained and briefed about halal, which took approximately one week. In order to meet the stringent halal requirements, staff had to modify in-store procedures, such as ensuring gloves are changed when switching from wrapping bacon free products to foods that contain bacon. A registration fee of $600AUD per year is charged by the Halal Certification Authority. Finally, as part of the certification authority, the restaurant employs a halal slaughter-certified staff member to sign off on meat delivered to the restaurant. Mr Favotto advertised the first halal McDonald's restaurant in Australia in a local Arabic Newspaper. Most of the knowledge regarding the McDonald's Punchbowl's halal initiative was spread by word of mouth and free publicity in the media. McDonald's Punchbowl is also listed on www.halalsquare.com.au, one of Australia's comprehensive online halal dining guides that caters for the Muslim community. Winning the small business category of the Multicultural Marketing Awards 2002, held by the Community Relations Commission of New South Wales, further helped Mr Favotto gain media exposure, via interviews with media such as ABC Radio, SBS Radio and The Australian. The six-month effort by McDonald's Punchbowl to have the restaurant accredited by the Halal Certification Commission certainly paid off. Mr Favotto estimates that 60% of his customers are Muslim people, with many of them travelling across Sydney to eat halal Big Macs or cheeseburgers; some of these people have not eaten McDonald's burgers in over 10 years, while other have never eaten one. Since it's halal certification in September 2002, McDonald's Punchbowl has enjoyed a 15% increase in sales and an increase in its customer base - with 700-800 new customers visiting the store each week. 

Q: Using your knowledge of segmentation, identify and describe two potential segments that McDonald's Punchbowl can target. Ensure you explain the variables on which were used to identify the segment.