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Marketing of McDonald’s products and services Case Study

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Updated: Apr 11th, 2019

Abstract

For organisations to market their products and services, they need to adopt appropriate marketing strategies that are consistent with the dynamics of the industry in which they are established.

The goal here is to reduce the negative impacts that the weaknesses and threats surrounding an organisation may have on the success of the organisation.

Any marketing strategy that helps in the realisation of these concerns needs to lay out conspicuously an organisation’s market segments, target markets, target strategy and even the positioning strategy as in the case of McDonald.

Introduction

Marketing involves one of the noble activities an organisation does to create awareness of the value for its products and services.

In a broader perspective, marketing entails market research, market segmentation, setting of marketing strategies, evaluation of the marketing environment through SWOT analysis, and even positioning of marketing strategies among others (Kotler et al, 2009, p.56).

In an effort to set out a clear understanding of each of these elements constituting the marketing function, the case of McDonald is analysed in this paper.

Essentially, it is argued that a proper design of all these elements amounts to an incredible success of the placement of McDonald’s products and services: something that has made the organisation realise a global presence.

Industry Background

McDonald operates in an industry of fast foods. In this industry, the major target market includes all people whom the industry believes lack time to prepare food and hence opt for ready-to-eat foods. Such people include young people and working class persons (Surtherland & Sylvester, 2000, p.23).

Even though this target market constitutes a large market segment enough to sustain long-term operations of all the organisations operating in the industry, increasing concerns and association of fast foods with health challenges such as obesity coupled with its associated ailments such as diabetes and high blood pressure among others poses a threat to the industry.

This implies that the trend for continued growth for consumption of fast foods is challenged.

Company Background

McDonald opened its first store in 1971 in Yagoona in Sydney, Australia. However, the company had been in operation in the USA having opened its first store at Illinois, Chicago, in 1955.

Today, the organisation is one of the largest fast food retailers not only in the USA but also in other parts of the world such as China and Australia. It has about 30,000 stores across the world with new stores being established with time.

Research indicates that McDonald opens a store after four to five hours (Greco & Michman, 1995, p.12). Across the world, the presence of McDonald is experienced in about 119 countries. In Australia, the company has about 730 stores while it has about 800 stores in operation in China.

Additionally, McDonald employees about 390,000 people who serve about 54 million people across the world per day. In the year 2005, the company reported revenue of about 21 billion U.S. dollars.

Essentially, the company expands through opening of franchises whereby, in foreign nations, it reengineers its products to meet the needs of the local people.

Micro-environmental forces

Microenvironment forces involve those internal factors that are so close to a company to the extent that they affect directly the organisational marketing strategies. For MacDonald, some of these factors include customers, shareholders, employees, and the media.

Good advertising plays a central role in aiding an organisational marketing strategy to succeed (Kotler et al, 2009, p.19). Media attention on organisations’ operations may result to either building success of organisational marketing strategies or even destroying them.

For MacDonald, the company aims at achieving three fundamental aims by harnessing media to create customer awareness about the products of the company besides making them have a positive feeling about the products in a bid to remind them about the products offered by the company.

Customers constitute subtle microenvironmental factors that influence the company based on their preferences, choices, and even the reason why they buy them. On the other hand, MacDonald has a large number of employees constituting both young and old people from a multicultural population.

Therefore, the marketing strategies adopted need to ensure an increment of the profitability of the company so that the shareholders can reap maximally from their investments.

SWOT Analysis

In the daily operation of any organisation, situations are encountered, which act as strengths, weaknesses, opportunities, or even threats to the success of any organisation. For MacDonald, strengths include the company’s Global presence and the capacity to have developed a worldwide brand image and good reputation.

The company applies a global presence strategy in every market it enters globally. Still, it takes in the local cultures and preferences of people in the foreign market or country. An additional strength of the company is the capacity to be innovative besides offering of attractive products to woo customers.

Further, McDonald offers customers a great service, choice, and a reasonable value. Amid these strengths, McDonald encounters some weaknesses such as quality challenges across the franchise network globally. Arguably, consumers demand the same quality of food in all the franchises, something that is hard to realise.

Another weakness is the poor reception of its ads by some people. For instance, the company has had cases of under-par advertising or marketing particularly in the Asian market. In these incidents, the ads were taken as offensive by natives. This affects McDonald’s brand image negatively.

Opportunities available for McDonald to capitalise on to enhance its success include introduction of a new segment, which supports the latest trends of health conscious groups, fast growth of fast-food industry, and Joint Ventures with supermarkets.

Other opportunists are free Wi-fi for customers coupled with the deployment of environment friendly products and processes that can help achieve social corporate responsibility.

Nevertheless, the company also experiences some threats including stiff competition from other companies. Consumer spending is also adversely affected by global economic crunches.

Market segmentation

For a firm to succeed in placing strongly its brand, it needs to determine its market segment. Market segmentation involves dividing consumers into subsets comprising of common needs in terms of consumption of goods and services offered for sale (Dann & Dan, 2004, p.87).

Once segmentation is done, appropriate market campaigns are set to target the subsets. McDonald accomplishes segmentation in two main ways: demographic segmentation and psychographic segmentation. From the context of demographic segmentation, McDonald initially targeted young people.

However, with time, it included children and elderly people through happy meals in the case of children and Egg McMuffin for elderly persons. Psychographic segmentation is applied to middle and working class persons.

Target markets

McDonald’s target market embraces all demographic sections in the population. These sections encompass gender, age, race, nationality, and income among others. The services offered must satisfy this target market (Yelkur, 2000, p.109).

Essentially, MacDonald targeted youngsters with its attractive packages. Later, the company incorporated workers who had no available time to cook or even eat while seated at a restaurant as another target market.

Since it is after the success these two groups of people, McDonald took marketing strategies to seek out for genuine markets characterised by aspects such as culture and economy.

With the emerging dietary concerns, the company has also considered people impacted by concerns of the capacity of high calories to lead into health problems as a specific target market.

To satisfy the concerns of this target market, the company has created soya hamburgers. This particular product is a number one choice for many groups of people including the vegetarians.

Targeting strategy

McDonald utilises pricing and advertising as the main strategies for targeting. In terms of prices, McDonald has been known over a long period to offer competitive prices for its humbugger chains in comparison to all other chains both within the U.S. and in international franchises.

Consequently, the company has been able to attract and retain large family patronage. On the other hand, location is a targeting strategy that has led to the immerse success of the company.

In this context, Greco and Michman argue that McDonald is the first chain selling humbugger that has been able to grow even into suburbs and areas that are crowded in mega cities (1995, p.25).

In case of advertising, marketing strategies consider a particular target audience to help in designing of the target character.

Positioning strategy

To help in positioning of the McDonald’s products, ads essentially utilise children as the main audience besides incorporating parent characters. This helps in creating the impression that the products of the company are created with the needs of the entire family in mind.

Arguably, as a positioning marketing strategy for McDonald, it is possible for a single commercial ad to capture multiple audiences and yet create a sense of identification.

The company also positions itself through a global fundraiser that benefits Ronald McDonald to house children coupled with charities.

Recommendations and conclusions

McDonald remains to be the largest worldwide distributer of fast foods. Amid this centrality in the market, the company needs to take into cute consideration all the environmental factors that afflict it coupled with the marketing strategies that the company uses now.

Every strategy has its advantages and disadvantages. The implication here is that, to limit weaknesses and threats and capitalise on opportunities and strengths, the organisation’s management needs to determine what works best for the company so that all the constituents of the microenvironment are satisfied and harnessed appropriately to enhance the success of the organisation in the future.

Hence, the recommendation is that McDonald needs to ensure a careful planning, evaluation, and implementation of all marketing strategies since a change of strategies produces valid repercussions. Some of the repercussions may lead to a failure of the organisation while others may result to success.

The best repercussion is the one, which truncates into organisational success. Therefore, with the growing health concerns among children and other sections of population due to the consumption of fast foods containing high calories, McDonald needs to determine how healthy its foods are besides knowing the extent that its products meet the health concerns of its customers.

Reference List

Dann, S., & Dan, S. (2004). Introduction to marketing. Australia: Wiley.

Greco, J., & Mitchman, D. (1995). Retaining Triumphs and Blunders: Victims of Competition in the New Age of Marketing Management. New York: Quorum Books.

Kotler, P., Adam, S., Denise, S., & Armstrong, G. (2009). Principles of marketing (4thed.). Australia: Prentice Hall.

Surtherland, M., & Sylvester, K. (2000). Advertising and mind of the consumer: What works m, what does not, and why? New Jersey: Allen & Unwin.

Yelkur, R. (2000). Customer satisfaction and service marketing mix. Journal of professional services marketing, 21(1), 105-115.

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