Marketing Plan

Babyln R. Encarnado

I. Executive Summary

•Company Description

HISTORY

McDonald's was introduced in the Philippines by Chinese-Filipino businessman George

Yang, who resided in the United States in the 1970s, though never patronized a McDonald's
outlet during his stay. Aware of the fast food chain's success in North America and its increasing
presence in other parts of the world, Yang researched fast-food business operations; in 1974, he
contacted McDonald's headquarters in Illinois regarding a proposal for rights to open outlets in
the Philippines. Yang's proposals were initially ignored, though he continued to remind the
company regarding his business interest. In 1976, representatives of McDonald's International
sent a delegation to the Philippines to conduct a feasibility study on establishing presence in the
Philippine market.

McDonald's International was also considering partnering with other local firms in establishing
presence in the Philippines' other than Yang. Yang sold himself as a "long term partner" and
volunteered to work in the then-British colony of Hong Kong where he networked with the
business associate of the holder of the master franchise in the city and worked with uniformed
crew at an outlet in Kowloon. In 1980, McDonald's decided to award the master franchise to
Yang and, shortly thereafter, set up the first Filipino McDonald's outlet within the University
Belt area in Manila the following year.

MISSION AND GOALS

To serve the Filipino community by providing great-tasting food and the most relevant

customer delight experience. First choice when it comes to food and dining experience. First
mention as the ideal employer and socially responsible company. First to respond to the
changing lifestyle of the Filipino family.
CORE COMPETENCIES

Identify the organization's core competencies McDonald's core competencies are: trained and

experienced staff, product development, advanced technology, excellent locations, superior
customer service, franchising. Having a staff that is experienced and thoroughly trained is a
great way to meet the company's needs.

II. Situation Analysis

SWOT ANALYSIS

Strengths

 Strong brand name. McDonalds has been around since 1954 and has established a strong
brand name through effective promotion and quality fast food.
 Global brand value of about 97.7 billion U.S. dollars according to statistica.com
 Strong brand loyalty. Consumers have loyalty for McDonalds because of their product
variety, quality and strong brand presence globally.
 Large product range. McDonalds have a large product range from, burgers, fries, drinks
and desserts.
 Very effective promotional strategy that drives home the message of Mcdonalds of being,
quality but quick food.
 Pricing strategy that caters for a wider market segment. McDonalds have a value menu
aimed at price sensitive buyers e.g. students and Mcdonalds often introduce a limited
time premium menu aimed at those who can afford to spend a little more.

Weaknesses

 Limited range for vegetarians and vegans.

  Long queues during busy period.
 Food considered unhealthy
 No alternative to French fries within the UK.
 Animal cruelty issues
 Breakfast finishes too early in some countries resulting in loss of sales

Opportunities

 To sell a wider option of food aimed at the vegetarian market. The Vegan burger tested in
Finland was very successful so there is an opportunity to expand it internationally.
 Greater range of fish related products.
 Introduce speciality fries like sweet potatoes fries as an option to potatoes fries.
 Introduce McDonald Café within the UK to tap further into the coffee market.
 Introduce a greater range of coffee's such as decaffeinated drinks

Threats

 From competitors such as Subway, KFC and Burger King.

 Changing consumer diets influenced by governmental campaigns to stay healthy.

5 C's of Marketing

COMPANY

 Product
The essential products that are sold in McDonald's include cheeseburgers,
hamburgers, French fries, chicken products, desserts, soft drinks and breakfast items.
With an aim to minimize obesity trends and criticism, the company often changes its
menu.
 Competitive Advantage 
 McDonald's is an industry leader in the fast food industry. Its key competitive advantages
have included nutrition, convenience, affordability, innovation, quality, hygiene, and value added
services. The success of the organization has been its ability to leverage its key strengths so that
it can overcome weaknesses.

 Goals

The main aims of the business are McDonalds main aims are to serve good food in a
friendly and fun environment, to be a socially responsible company and provide good returns to
our shareholders. The company aims to provide its customers with food of a high standard, quick
service and value for money.

COLLABORATORS
In partnership with McDonald's Philippines, one of its partners, Coca-Cola donated
Minute Maid products and other beverages to the McDonald's Kindness Kitchen, which to date
has already served more than 260,000 meals to beneficiaries in Metro Manila and key provinces.

Unlike most fast food restaurants that have Coca-Cola delivered in plastic bags,
McDonald's has the product delivered in stainless steel containers that help preserve the
ingredients and keep the Coke tasting fresher.

CUSTOMER

 Target Audience

The main target customer for McDonald's includes parents with young children, young
children, business customers, and teenagers. Perhaps the most obvious marketing for
McDonald's is its' marketing towards children and the parents of young children.

 Customer Motivation
 McDonalds uses both informative and persuasive adverts, the informative ones are about
eating healthy and the persuasive ones persuade people to buy the food sometimes, with TV
adverts they show people eating the food and really enjoying it.

COMPETITORS

Burger King and KFC are two competitors of the organization. Burger King has been

successful because it has been able to focus on product diversification, reliable customer
services, and continuous innovation. KFC is the biggest rival of McDonald's. KFC was founded
in 1930, and its headquarters is in Louisville, Kentucky. KFC operates in the Restaurants
industry. KFC has 186,000 fewer employees than McDonald's.

CLIMATE

 Law and Regulation

McDonalds and all other businesses were forced by law to make fair pay to all races, and
genders. The Fair Labor Standards Act enforced a minimum wage, and overtime pays for
workers. The Equal Pay Act demanded that men and women of equal jobs must be paid equally.
The Occupational Safety and Health Act of 1970 required safety equipment for workers and
enforced a maximum exposure time frame for hazardous substances. The Immigration Reform
and Control Act of 1986 affected fast food businesses and McDonalds especially. It forced
employers to verify employment eligibility for all new workers.

 Social Behavioral Trends

Consumer Behaviour is important in the marketing industry as consumer make buying

decision on day to day basis. I will chose McDonalds to show how they managed to understand
various aspects of consumer buying behaviour to make their business successful worldwide.
 McDonalds is already one of the popular fast food restaurant in the world. You can find it
anywhere. They offer incredibly diverse food items across its franchises around the world,
through standardized templates such as happy meal or value meal.

PORTER'S FRAMEWORK 

 Threat of new Entrants

New entrants can impact McDonald’s market share and financial performance. This element
of the Five Forces analysis refers to the effects of new players on existing firms. In McDonald’s
case, the moderate threat of new entry is based on the following external factors:

 Low switching costs – Strong Force

 Highly variable capital cost – Moderate Force
 High cost of brand development – Weak Force

 Threats of Substitution

Substitutes are a significant concern for McDonald’s Corporation. This element of Porter’s
Five Forces analysis model deals with the potential effects of substitutes on firm growth. In
McDonald’s case, the following external factors make the threat of substitution a strong force:

 High substitute availability – Strong Force

 Low switching costs – Strong Force
 High performance-to-cost ratio of substitutes – Strong Force

 Competition Rivalry 
 McDonald’s faces tough competition because the fast food restaurant market is saturated.
This element of the Porter’s Five Forces analysis model tackles the effects of competing firms in
the industry environment. In McDonald’s case, the strong force of competitive rivalry is based
on the following external factors:

 High number of firms – Strong Force

 High aggressiveness of firms – Strong Force
 Low switching costs – Strong Force

 Buyer Power

McDonald’s must address the power of customers on business performance. This element of
the Five Forces analysis deals with the influence and demands of consumers, and how their
decisions impact businesses. In McDonald’s case, the following are the external factors that
contribute to the strong bargaining power of buyers:

 Low switching costs – Strong Force

 Large number of providers – Strong Force
 High availability of substitutes – Strong Force

 Supplier Power

Suppliers influence McDonald’s in terms of the company’s production capacity based on the
availability of raw materials. This element of the Five Forces analysis model shows the impact of
suppliers on firms and the fast food restaurant industry environment. In McDonald’s case, the
weak bargaining power of suppliers is based on the following external factors:

 Large number of suppliers – Weak Force

 Low forward vertical integration of suppliers – Weak Force
 High overall supply – Weak Force

III. Market Analysis

SEGMENT

 Demographic Segmentation

Is a key segment of McDonald’s tends to focus on the most. This segment includes students,
kids, and families. McDonald’s as a suitable environment for students and allows them to hang
out with theirs friends. McDonald’s is a frequent lunch destination for students and an after-
school hot spot.

 Psychographic Segmentation

Is a associated with convenience and lifestyle. In the US that can change by region, state, at
the city level. For instance in the southwest McDonald’s pushes barbeque sandwiches and fried
southern style sandwich. McDonald’s has transformed into a place to go relax and even be
entertained.

 Behavioral Segmentation
Is associated with special occasions like kids birthday parties. Local youth groups and sports
team come to McDonalds not only for the cheap prices, but also for the ease of accommodation.
A McDonald’s can hold many people and caters to the younger crowds. Their menu and
advertising is specifically geared toward the goal pf maintaining a young customer base.
TARGET MARKET PROFILE
The main target customer for McDonald's includes parents with young children, young
children, business customers, and teenagers. Perhaps the most obvious marketing for
McDonald's is its' marketing towards children and the parents of young children.

POSITIONING

McDonald’s uses adaptive type of product positioning and accordingly, the company is engaged
in periodical re-positioning of products and services according to changes in the segment
(Dudovskiy 2016). The following is a direct quote from McDonald’s franchise strategy
document:

“McDonald’s has made itself to be the family friendly low cost restaurant in the fast food
business. We have a narrow scope for a customer base and a low cost strategy” (McDonalds
2016).

IV. TACTICAL PLANS

Product Strategies

McDonald's features several products on their menu that are permanent and do not
change. Examples of this include their basic hamburger and cheeseburger, the Big Mac and the
Quarter Pounder. After the initial development, these items remain on the menu for extended
periods of time without undergoing significant changes. This strategy ensures that there is always
something familiar for consumers on the menu. In addition to its permanent product offerings,
McDonald's regularly develops temporary products. The McRib, for example, is a product that is
offered only seasonally. The Big Ocean burger is an example of a burger that was developed as a
temporary product, offered only for a few months in 2007. The purpose of this product
development strategy is to give customers something new to experience on each visit and to
experiment with new items that may become permanent.
 Price Strategies

McDonald’s pricing strategy also involves price bundling combined with psychological
pricing. In price bundling, the company offers meals and other product bundles for a discount. In
psychological pricing, McDonald’s uses prices that appear to be significantly more
affordable, McDonald's itself (2007) is vague about its pricing strategy. Company understands
that a customer's perception of value is an important.

Place Strategies

This element of the marketing mix enumerates the venues or locations where products are
offered and where customers can access them. Restaurants are the most prominent places where
the company’s products are distributed. However, the business utilizes various places as part of
this 4P variable. The main places through which McDonald’s distributes its products are as
follows:

1. Restaurants
2. Kiosks
3. McDonald’s mobile apps
4. Postmates website and app, and others

Promotion Strategies

Advertisements are the most notable among McDonald's promotion tactics. The

corporation uses TV, radio, print media and online media for its advertisements. On the other
hand, sales promotions are used to draw more customers to the company's restaurants.
V. Appendices

https://sites.google.com/a/email.vccs.edu/bus100sthames/home/equal-employment-laws-and-
mcdonalds
http://panmore.com/mcdonalds-five-forces-analysis-porters-model

https://www.mcdonalds.com/us/en-us/about-us.html

VI. Learner's Resume

Name; Babyln Roque Encarnado

Section; 12 ABM