McDonald's Marketing Activities - Essay Example

McDonalds Marketing plan Executive Summary This marketing plan attempts to highlight some of the possible causes on one side and possible solutions to the problem of product failure on the other side. McDonalds’ Arch Deluxe is a hamburger that was sold in 1996 by McDonalds. The hamburger specifically targeted the adult population. Despite recording substantial volume of sales, the product was discontinued from the market. Some critics argue that the McDonald’s Arch Deluxe was forced out of the market as a result of intense completion from Carl’s Jr. This is because Carl’s Jr. was selling the same type of hamburgers but at half the price. Others offer that the accompaniments that were served with the hamburger, mustard/mayo sauce on potato roll to be specific resulted to the failure. The mega campaign which failed was also partially blamed for the product failure as it targeted the adult population only. Still, some customers offer that the high calorie in the burger was the reason behind the product failure to capture the market. Background McDonalds is undoubtedly one of the fastest growing companies in the fast food industry, which is dominated by a host of players. Some of these players include Carl’s Jr, Burger King, KFC, and Pizza hut. These competitors pose a threat to McDonalds as they have conduced to the decrease in profits. This is because of the alternative products that these competitors continue to offer to the customers. McDonalds is a franchise of many companies with only 19% owed by the company. The company has over 33000 restaurants spread across the globe, serving close to 58 million customers. The company also has dozens of branches situated in 119 countries. McDonalds collected an average of $22,744,700 million in revenues from its global branches in 2009 with operating profits standing at $ 6,841000 million. Market Analysis Analysts predict that the fast food industry is growing at a first rate as customers’ demands for fresh quickly served meals surges. One of the dominant key players in this market is the McDonalds. The company is currently at its maturity level in the product life cycle. However, the fast food market faces constant decrement because of factors such as limited expansion sites, increasing operation costs, and market saturation. Vivid competition in the market has led to production promotion techniques such as price cuts, which have resulted to a diminution in profitability in the industry. Normal Forecast Most of the products that fail to capture the attention of customers in the market are not always inferior. In order for a company to succeed in launching a product, management has to undertake an in-depth research on the market. Through such an initiative, the organization can come up with creative ideas on the areas of packaging, market communication, and pricing. All these activities are facilitated through brainstorming with all the departments in the organization. Failure to consult will result to the release of uncompetitive products in terms of price, packaging, and market communication, into the market. The same applied to McDonald’s Arch Deluxe, which despite massive campaign, failed to sustain the market forces. As mentioned above, some of the reasons were high market price, mega campaign fail and poor market presentation. The other reason behind product failure is intensive competition. When many producers offer the same product to the market, the resultant effect will be edacious competition, where only the superior products in price, packaging and advertising, end-up being selected by the customer. A good example is Carl’s Jr., which blocked the entry of McDonald’s Arch Deluxe. According to Brand marketing (2006, p. 3), Jack Greenberg McDonalds’ CEO, on an interview with the Financial Times consented that the company spent too much time deciding on when to launch the product. Most of the company’s marketing and branding decisions are made at the headquarters in Oak Brook, Illinois. As such, the ingredients to the McDonald’s Arch Deluxe were arrived at in Illinois. Products such as the Filet o’ Fish, the Hot Apple Pie, Big Mac and the Egg McMuffin, were discovered in kitchen as a result of consultations with customers, which resulted to their success. Other products that failed as a result of the same centralized decisions include McPizza and the McLean burger. SWOT Analysis Strengths McDonalds’ is a company with brand recognition globally as it has over 33,000 restaurants, in 119 countries serving close to 58 million customers. The company’s outlets are strategically located in places such as airports, bus and train stations, large theatres, and sporting arenas. Due to this positioning, McDonalds creates awareness to the customers, consequently market the brand. Weaknesses As explained earlier, the fast food market is predominately occupied by various players. As a result, McDonalds has to experience three product failures with McDonald’s Arch Deluxe. Increased competition has also led to a decrease in revenues as each company tries to reach the market through attractive prices. The centralized decision making system were decisions are made in Illinois has often led to product failures as the products fail to capture the demands of the customers. Opportunities McDonald’s Arch Deluxe is not a new product to the market, and as such, re-launching it will cost the company less funds and efforts. There is also an increase of demand for McDonalds’ products in emerging markets such as Latin America, Europe, and Asia. Threats Rival companies pose a real threat as they copy-paste McDonalds’ products, only to offer them to the market at lower prices. Such competitors include Carl’s Jr, Burger King, KFC, and Pizza hut. Marketing strategies Marketing includes the identification of customer needs and addressing them through unique products and services that differ from those offered by competitors. The first step to undertake in creating an effective marketing strategy is identifying the audience. A good marketing strategy is one that recognizes the satisfaction of customer demands as the main goal. The next step is identifying marketing channels. Since the target group is adults, some of the main channels of marketing will be interactive and Internet marketing strategies. Interactive marketing involves using conversation to market McDonalds Arch Deluxe. The advantage of using this channel is that management is able to get quick feedback regarding the product. Internet marketing, also known as E-marketing will be will be efficient in reaching customers who have access to the internet. Some of the common tools used here include banner advertising, E-mail, SEM, sponsorship, and social-media marketing. SEM refers to search engine marketing. Through this channel, a marketer purchases sponsored links to certain search key words that will allow customers to see their products in various search results. The other marketing strategy will be producing the McDonalds Arch Deluxe in various delicacies as proposed by customers and changing the advertising message previously used. If the above methods fail, rebranding of the product to be suitable for all ages should be tested in the market. The objective of these marketing strategies is to re-launch the McDonalds Arch Deluxe hamburger back into the market as a new, fresh, and healthy hamburger. A good feedback mechanism should be established. Through the feedback mechanism, results will be regularly analyzed to establish if the objectives are being realized. Conclusion In order to effectively re-launch McDonalds Arch Deluxe, all the mistakes associated with the previous campaign must be corrected. A catchy advertising message should be developed. To prevent a subsequent product failure, an effective marketing strategy should be established. Once a marketing strategy is in place, responsibilities should be delegated to different people who will ensure that the strategies are implemented. Systems should be put in place to obtain feedback to establish whether the objectives are being met, failure to which another strategy to reproduce the hamburger in three other tastes of “Arch Shrimp Burger”, Arch Soy Burger” and “Arch sweat teriyaki Burger” will be implemented. This will ensure that all types of customer needs are addressed including those of the vegetarians. Work Cited Brand Marketing. 2006. Classical brand failures: McDonald’s Arch Deluxe. Brand Marketing. 2006. Web. 1 Dec. 2012. . Read More