McDonalds Marketing Profile - Case Study Example

Introduction

McDonald's Corporation is a public company and runs its business as an international franchised hamburger fast food restaurants since 1974 in the United Kingdom and founded in the United State in 1940 (McDonald's Corporation). It currently operates over 1,250 restaurants and supported a range of community activities such as charity events and sport matches (McDonald's Corporation, 2013). With its well-known “golden arches” logo, consumers around the globe are familiar with McDonalds as one of the world’s leading fast food restaurants and brand. A global presence around the major economies such as the US, UK, India, China and other nations, the company’s reach for customers is recognized as one of the most far reaching (Martin, 2014).

However, while market saturation is considered one of the measures to indicate whether the marketing strategy of the company works towards meeting the company’s specific corporate goals. This study looks into the marketing strategy of McDonald's with emphasis on the industry competition as well as the applied strategies to ensure that the company stays afloat over other competing companies. In addition, the study investigates the McDonald’s competitors and customer profile in terms of the company’s focus to identify with the business culture and service of the company.

Mission and Vision Statements

McDonald’s mission statement states that the company strives to make the world a place for people to eat (Farfan, 2016). To put the mission into perspective, the company’s vision statement states that it aims at offering quick service restaurant experience (Pauline, 2015).

Illustration 1: Competition Mind Map

The mind map above shows the fast food industry and the competitors McDonalds is faced with. Among the competition categories includes direct, indirect, secondary, and substitute. These categories of competition are classified with respect to target market, level of competition, and strategy in promotions.

Competitors

Direct

McDonalds is internationally operating restaurants with numerous products within its menu remaining the same all around the globe (Martin, 2014). Although the company recognizes and appreciates cultural differences among nations it invests in, it is seen that the company also sustains its products to be easily recognizable around the world. One of the company’s direct competition is the Burger King chain restaurant which also operates at a global scale (Martin, 2014). Following the presence of Burger King within the international market, the company’s market share is affected since what would be 100% market share is shared among McDonalds, Burger King and other fast food enterprises. However, while considering international direct competition, local competition also influences the company’s performance. Local chain restaurants and small businesses also provide direct competition due to their presence in areas where McDonald’s restaurants have not been established.

Indirect

Indirect completion for McDonald involves other companies that do not take fast food as their main focus of trade. However, while still making food and trading other consumer goods, it is observed that McDonald’s market share is also affected by these. For instance, although companies such as Starbucks, Taco Bell, Jamba Juice, and Pizza Hut do not necessarily trade the very same menu as McDonalds (Spiderbook, 2015), these companies provide indirect competition in that clients can decide to purchase different tastes from these instead of the routine menu within the McDonalds (Mishra, 2011). On the other hand, most McDonald’s restaurants are located within urban areas where other cuisines, such as barbeques, also prevent customers from visiting a McDonald restaurant for the purchase of food.

Substitute

McDonalds’ products are popular among customers due to their special recipes and methods of preparation. Although most of its competitors prepare foods with the same names, the customer arguments on the food preparation and taste sets the company’s products aside from the competition. Nevertheless, direct substitute to McDonalds menu items are mission, companies such as Yum are recognized as having been done better over the years in China than McDonalds (Spiderbook, 2015). This indicates that the company’s products are unique to the customers but at the same time, indirect products by the competition provide as much competitive power (Thickstun, 2012). On location, McDonalds restaurants have a uniquely similar appearance. To pull off the appearance of these restaurants requires more space than competitors such as Subway need to attract a decent portion of the market share (Spiderbook, 2015). As a result of the layout objective, Subway has historically, 2015, outdone McDonalds in global sales.

The target market of McDonalds takes into account the family. As such, the restaurant offers products that consider toys for kids. However, competitors such as Wendy’s and Fuddruckers are seen as substitute competitors because they do not consider kids in their menu but offer considerably long list of products to the adult customers. Their entire menu list is adult focused and toys for kids are missing since kids are not a considered patronage cohort (Slotegraaf, & Pauwels, 2008).

Consumer Profile

In terms of market focus, McDonalds targets everyone who can afford the long list of products ranging from foods to beverages and free toys to kids (Mishra, 2011), as a result, McDonald's welcome different aged of gender from children to adult in demographic segmentation. Using the opportunism-independent theory, it is observed that the existence of firms through the permission of one set of production factors on another. Therefore, by categorizing customers into their respective cohorts, McDonalds can deal with competition through increased targeted-marketing (Nickerson, & Zenger, 2008).

There are main five categories of target markets for the company. Firstly, the company makes foods branded Happy Meal which kids from aged three to seven can choose from, since this is considered a healthier choice. Besides the targeting of kids, the product line also responds to various activism attempts to have fast food restaurants label their products information to determine which ones could cause health issues to consumers. Secondly, the whole family package takes into account family outings of outside meal. The Happy Meal package has a discount of toys for kids which is also a promotional attempt to influence as many kid-customers as possible (Mishra, 2011).

Thirdly, for student package, McDonald's offered student discounts in their product targets school goers while the Café Goer’s package is for those who would like to sit in a restaurant to consume their meals. Working adults on the other hand, takes into account the American culture where busy employees consume food right at their desks. Such an opportunity has driven McDonalds to offer drive-thru, takeaways, McDelivery packages around the clock to encourage a greater volume of customers served and decrease the waiting time (Mishra, 2011). And lastly, the café goers package offers the McCafe treatment which offers entertainment space and a relaxing environment to enjoy a meal. The target age group ranges from twenty-one to thirty-five, energetic working class and young families (Thickstun, 2012).

Market Mix (7ps)

Product

McDonald's served Since kids make a significant portion of McDonalds’ consumers, the fast food giant makes more than just food for the kids (Mishra, 2011). Thus, besides food, kids have products targeting them such as the McDonaldland Kids Wear. In addition, the provision of toys to kids also helps the company market its brand (Nowlis, & Shiv, 2005).

Price

For McDonalds, prices differ from one market to another. Since McDonalds operates internationally, prices are adjusted to ensure that competitive prices are sensitive to spending, customer behavior, target market, and other factors that may affect the overall fair market price of the products. However, the low-price strategy, especially with offers ranging from $1, helps the company saturate its brand to the market but at the same time contributes to financial losses due to minimal or no profit at times (Martin, 2014). Using the theory of the firm concept, McDonald’s pricing model is related to the firm’s decision to make profits varies from the intertemporal price discrimination model which suggests that firms can adapt varying, especially pricing models when launching new products (Su, 2007).

Place

For McDonalds, the US market provides one of the extensive investment areas the company has traded in (Martin, 2014) However, given that the number of restaurants within the US surpasses those in any other nation at the global scale, the company prides itself for having a considerably large stake in the market share. Nevertheless, the international presence has also played a significant role of promoting the company’s financial and market power. As a results, its presence in more than 116 nations helps the company to saturate the fast food market. The long lasting relationship concept shows the company’s objective of mass expansion. As the company continues to venture into foreign markets, it continues to explore the viability of long term relations with the respective economies. As financial strategy, the global presence helps the restaurant chain to maintain a productive growth, one that prevent the company from harsh effects of market-based financial crises (Spiderbook, 2015).

Promotion

Whether in the US or in the UK, McDonalds restaurants are themed the same way as a strategy to make them more appealing to loyal clients. In addition, the business environment for every one of the restaurants has the same ambience and feel. However, the company’s global target has also called for the company to ensure that culturally sensitive products are prepared within its restaurants. For instance, since India does not largely consume beef, the company has included pork in the menu while for the Muslim nations, the company considers non-pork recipes. Nevertheless, most of its menus are arranged the same with visual aid provided to help consumers identify their favorite meals even when the menu language is not familiar to the client (Slotegraaf, & Pauwels, 2008). For business purposes, McDonalds promotes its brand by relating to the clients in a more rewarding way. For instance, the company gives the McDonald Membership Card while also offering gifts for children and patrons with children. Due to kids’ presence, the company also stages out a kids play space (Martin, 2014).

Processes

McDonalds restaurant chains takes unification of processes a marketing mix strategy. Throughout all the restaurants, the kitchen equipment is similar and at the same time food preparation procedures are the same. Therefore, whether a client is served in India or in the US, the same type of order would taste the same (Nowlis, & Shiv, 2005). One incident of unifying the process include a case where management had to ferry building bricks from the US to the UK to ensure the authenticity of resemblance. Additionally, in order to increase its presence and reach to more customers, the company also runs online businesses where customers can order for door-step delivery (Martin, 2014).

People

Due to its global presence, the company does not export labor from the US to foreign nations. Applying the neoclassical competitive market theory indicates that competitive efforts push companies to seek profit maximization while targeting utility-oriented clients (Love, 2005; List, 2002). Since it approaches its business strategy by franchising, the company trains locally and at the same time offering a unified information transfer to stakeholders to capture sustainable market share (Richards, & Padilla, 2009). For instance, the company offers training and development studies at the Hamburger University, US. The approach is to ensure technical skills and customer focus are considered competitive advantage for the company. The hiring from local environments ensure that the service providers are familiar with the eating habits as well as other lifestyle aspects. To the company, cultural beliefs and practices are taken into account when establishing a restaurant in any given foreign nation (Martin, 2014).

McDonald's, on the other hand, believes that well-support and education to their employee is significant in order to increase their customer service and therefore, McDonald's provides lifelong skills and career opportunity of employee training such as management and leadership courses for those employee whom would interested being a manager (McDonalds Corporation, 2008).

Physical Evidence

Physical evidence of the promotional strategies applied by McDonald include the structural similarity of its outlets. The interiors of the outlets are attractive with digital menu boards. In addition, whether or not one is a regular client of not, meals for kids have toys accompaniment (Richards, & Padilla, 2009). The menu items have similarities such as the combinations of meals and beverages and fries in all the outlets. The evidence customers have help the company in marketing and sales promotion through word of mouth. Also, for first-time customers, the marketing strategies appeals considerably leading to possible return purchase. For traveler clients, ordering or buying McDonalds products across different states will still give the same experience in terms of taste, service, and cost (Martin, 2014).

Conclusion

In conclusion, the marketing mix gives McDonald’s an upper hand over the competition as outlet similarity contributes to higher rates of brand recognition, low prices contribution to market saturation, international presence contributing to higher returns, while different products target varying age groups to improve revenue generation.