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McDonalds has been ranked as one of the largest corporations in the world among the global restaurants that deal with fast food. The company was first established in 1948 in California by Dick and Mac (Gilbert 1999, p.2). it has chains of stores in more than 119 countries all over the world. From a careful analysis of statistical details, the company serves more than 68 million people daily (Gilbert 1999, p.2).
Notably, the company has experienced tremendous growth worldwide since it primarily deals with fast foods such as shakes, desserts, hamburgers, chicken and cheeseburgers. Research has revealed that the company has been able to accommodate numerous consumers’ preferences and tastes in their menu (Derdak & Jay 2004, p. 108).
Needless to say, the organization has developed strategies that have made it experience significant improvement since it first stated. It is against this backdrop that this paper discusses the evolution strategies, current marketing strategies and present details of the organization using the 7ps model.
Moreover, this paper will identify three issues facing the organization and make recommendations of what the organization should do in order to remain competitive.
Evolution of strategies
Right from the time the organization began to operate, it has experienced extraordinary growth specifically because it adopted a winning formula strategy (Gilbert 1999, p.11). In this case, the management opted to provide their customers with high quality food at a very low cost. Therefore, the organization adopted a “speedee service” strategy whereby they were able to offer quick services to customers (Love1997, p. 20).
This made the organization to flourish until 1955 when Ray Kroc joined this business organization (Gilbert 1999, p.12). Later on, the managers thought of exploiting the strategy on a larger scale all over US. In line with this, it adopted a franchising strategy whereby the company was licensed to sell its products within all regions in US (Gilbert 1999, p.15).
This gave the corporation an opportunity to open up many franchised restaurants. Evidence has shown that the majority of McDonald’s restaurants have been franchised. Needless to say, survey results has shown that due to the tremendous expansion, there are more than 1,150 restaurants serving approximately 2 billion people across the world (Gilbert 1999, p.23).
From a careful review of the organization’s history, it adopted the strategy of counter and drive through services that enabled it to conduct both indoor and outdoor seating (Love1997, p. 23). Empirical surveys have shown that the company has embraced the strategies to all its restaurants.
Other strategies include the Auto-Mac and McDrive services that enable consumers to have quick access to food (Gilbert 1999, p.38). It is imperative to note that these strategies make it easy for organizational operation such as paying, placing and picking orders in time (Love1997, p. 21).
It is imperative to note that after some decades, the organization’s management saw the need to adopt the trend of high quality drinks to capture more customers. Consequently, it adopted a café-style strategy through the introduction of McCafe (Love1997, p. 24).
This strategy was introduced in 1993 in Melbourne, Australia and majority of the chains in numerous states have adopted it. This strategy improved the overall sale by 60% (Talpau & Boscor 2011, p.56).
That notwithstanding, redesigning is one of the evolution strategies that was introduced in 2006. The restaurants have been designed with new flashy colors such as sage green, olive and muted red giving them a sunny look (Gilbert 1999, p.47).
Current marketing strategies
It is imperative to note that MacDonald has been able to market its products all over the globe. Notably, the organization has localized and multinational marketing strategies that enable it to link with local and international entrepreneurs (Gilbert 1999, p.52).
It is worth to note that the organization has a centralized structure and this enables it to make corporate decisions on marketing strategies. In line with this, the organization has numerous chains of restaurants all over the world and this makes it easy for it to reach out to consumers (Talpau & Boscor 2011, p.54).
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Besides, most of the restaurants are franchised and therefore creates a good aura for joint ventures. In this case, it makes the company to market its products through local and international entrepreneurs.
In addition, the organization has employed a niche marketing strategy. This is whereby large share of products are split and distributed to small niches such as vendor shops or restaurants in different sites (Talpau & Boscor 2011, p.57). This enables the organization to reach out for numerous phases.
For instance, the restaurant operator target urban dwellers with high income and are able to order numerous varieties of food. Moreover, there are marketers who target small satellite towns especially those that act as major destinations for tourists (Derdak & Jay 2004, p. 108).
Beside, there are general shops and vending sites in crowd pulling centers such as highways, airports, railway stations and shopping malls. Needless to say, the organization has also devised a strategy on how to reach out to middle-class people whereby they sell low-priced products for similar quality and services.
Research has shown that the company marketers target young children of ages 3-11. This has ingeniously compelled the organization to rebrand its products (Talpau & Boscor 2011, p.58).
The organization has improved its advertisement strategies as a means of boosting its reputation. Evidence has shown that some of the adverts have flashy colors with appealing names such as Happy Guy, Happy Meal and Fry Guys.
In this case, one of the most evolutional strategies for marketing its products is by ensuring that they are pocket friendly and of high quality (Jargon 2011, p. 2). Moreover, the company has strived to promote consistency in their supplies and this has provided an entertaining atmosphere for their customers.
The organization’s 7Ps
It is apparent that the organization has 7ps which it uses to ensure that it emerges competent among other competitors. These include products, place, price, promotion, people and process (Derdak & Jay 2004, p. 109).
It is essential to note that McDonald’s is committed to create standardized and quality products in order to match with consumer’s tastes and preferences, By so doing, the company is able to establish a suitable menu in order to conform to the laws and customs in every state.
Additionally, the organization has been able to select convenient locations and establish numerous outlets for its products (Love1997, p. 22). This ensures that it is able to access its customers in a wider scale. In line with this, it has products with standardized prices and this makes them to be cost saving. Nevertheless, different states have various pricing strategies depending on the immediate environment.
Promotion is one of the key tools in marketing (Derdak & Jay 2004, p. 109). Therefore, the organization promotes its products through adverts, sales promotion, personal selling and direct marketing. Additionally, the company values the people since they are the major target audience for their products (Derdak & Jay 2004, p. 109).
Challenges facing the organization
One of the major challenges facing the organization is the issue of social changes. Numerous government policies encourage consumers to take balanced diet in order to have healthier lifestyles. In most cases, the organization has been forced to change its products due to differing religious values and customs in numerous states (Facella & Genn 2009, p. 45).
Moreover, the organization has to forego some products in order to avoid social protests. The other issue facing the organization is competitive pressures from other companies such as Burger King, Wendy’s, Five GUYS AND Krystal (Facella & Genn 2009, p. 45). Additionally, recession and economic crises have largely affected the operation and volume of retail sales. This is due to the fact that people strain their household budget and this reduces the sales.
Apparently, the organization has won a reputation as one of the largest and expansive organizations in the world dealing with fast food. Therefore, it is recommended that it should strive to develop and maintain the brand image through adverts and quality services.
Moreover, it should ensure that all the chains maintain high-level standards in order to create value in consumers’ minds. Regardless of the harsh economic conditions, the company should maintain premium prices for its products (Love1997, p. 28).
Moreover, the organization should strive to educate people on the benefits of their products in boosting their health. This will make the products more appealing, a factor that will increase the sale volume.
Derdak T. & Jay, P 2004, International directory of company histories, St. James Press, New York.
Facella, P. & Genn, A 2009, Everything I Know About Business I Learned at McDonald’s: The 7 Leadership Principles that Drive Break Out Success, McGroaw Hill, New York.
Gilbert, S 1999, The Story of McDonald’s, Creative Education Press, New York.
Jargon, J 2011, “Corporate News: How McDonald’s Hit the Hot Spot.” Wall Street Journal vol. 1 no. 1, pp.2-7.
Love, F1997, “Big Macs, Fries, and Real Estate”. Financial Executive. Vol. 2 no. 4, pp. 20–26.
Talpau, A. & Boscor, D 2011, “Customer-oriented marketing – a strategy that guarantees success: Starbucks and McDonald’s.” Bulletin of the Transilvania University of Brasov. Economic Sciences. Vol. 4 no.1, pp.51-58.