MKT3130

FINAL REPORT

MCDONALD’S

Principles of Marketing (MKT3130)

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TABLE OF CONTENTS:

MCDONALD’S ................................................................................................................................................... 1

EXECUTIVE SUMMARY ...................................................................................................... 3

INTRODUCTION................................................................................................................. 4
MARKETING PLAN ............................................................................................................. 6
PEST ANALYSIS ......................................................................................................................... 6
SWOT MATRIX .......................................................................................................................... 7
STP ANALYSIS ........................................................................................................................... 8
MARKETING OBJECTIVES AND ISSUES ...................................................................................... 10
MARKETING MIX STRATEGY .................................................................................................... 10
RECOMMENDATIONS ...................................................................................................... 12
CONCLUSION .................................................................................................................. 13
REFERENCES .................................................................................................................... 13
APPENDICES.................................................................................................................... 14

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EXECUTIVE SUMMARY

To succeed in today's world, businesses have to invest into marketing strategies that

would help them get away from their competitors. The competition can be really fierce but if

businesses opt for great marketing strategies, their success may be growing.

The company that we’re going to see in this report is McDonald’s, the worldwide fast

food phenomenon. McDonald’s is undeniably the most successful one. This brand is mainly

the competitor of each and every fast food restaurant. But what makes McDonald’s so unique

and infallible is the marketing approaches they are taking.

McDonald's is the world's largest fast food chain with more than 36000 restaurants

operating in over than 122 countries around the world. The vast majority of these restaurants

appear as franchises. For McDonald’s CEO, “McDonalds stands for friendliness, cleanliness,

consistency, and convenience”.

But it is not because McDonald’s is successful that it does not encounter any problems.

Problem: it is believed that McDonald’s food is not healthy and can become a serious issue for

our health in the long term, if we keep consuming the food they offer. Even the members of the

staff say that it’s a bad choice to eat McDonald’s. But if we look at McDonald’s success, we

can actually see that the fact that their food is not healthy does not stop the hit they’re making.

But the brand should overcome this problem and become a healthy fast food chain.

McDonald’s, under this pressure, should completely change the ingredients and the menus to

attract more and more people and consumers. But not only that, it can easily become the one

and only fast food chain that sells healthier meals, compared to the competitors such as Burger

King or KFC. To make this possible, social media and advertisements are the key.

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By advertising the new goals and new meals, the audience will expand, and it will have a

positive impact on McDonald’s success. Moreover that, this kind of advertising will target a

specific audience, namely the avid consumers.

Besides becoming a healthier fast food chain, to succeed and achieve fruitful results,

McDonald’s should also: invest in the development and training the staff to deliver a high-

quality service to their customers. A good training program should ensure long-term growth.

The brand must also invest in menus customization to attract and target new consumers. Even

if these strategies seem basic, McDonald’s must follow them to not fail.

INTRODUCTION

Who doesn’t know about McDonald’s and its delicious burgers? Every human being in

the whole world heard about this fast food leader or has it implemented in his country.

McDonald’s is undeniably the most successful one. Also, every human being of all ages knows

about it, ate it, heard about it or had the best time of his life sharing McDonalds.

McDonald's is the world's leading fast food restaurant with more than 30,000 restaurants

in 119 countries serving 47 million customers each day. Although McDonald’s was neither the

burger nor the fast food inventor, but it has become the leader of it. With more than 32000

restaurants in the world, this brand is a symbol of globalization and the predominance of the

American culture. However, the brand has its success to the marketing strategies that it is using

to still shine after all these years. Their strategies aim to make their loyal customers want to

remain fervent consumers, but also to attract new potential consumers.

How McDonald’s history started? In 1948, Dick and Mac McDonald moved from

Manchester to Chicago and created the Speedee Service System featuring shakes, fries and

hamburgers that cost 15 cents. They were very successful back in the days.

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Then, in 1954, Ray Kroc, a native Chicagoan met the McDonald brothers and became

their franchise agent. Later in 1955, Ray Kroc opened the first ever McDonald’s in East

Mississippi. But he had a more global vision and wanted to expand the fast food chain more.

He opened 1000 restaurants in the United States and even in Canada and Puerto Rico in 1967.

This is when McDonald’s became global and worldwide. Regarding the logo and the designs

around McDonald’s, the color scheme chosen by the master painter was yellow, white, red and

dark brown. Soon these colors gave birth to the iconic and well-known Golden Arches M logo.

Later, Ray Kroc wanted to give a little boost to the brand and came up with a mascot for

children, the famous Ronald McDonald’s, a red-haired clown. It was made to appeal children.

In 1965, McDonald’s went public and even made it up to the Dow Jones Industrial Average.

Overall, McDonald's success was actually due to the company's skillful marketing but also to

their flexible response to each and every customer demand. McDonald's spectacular growth

continued. In 1972, they passed $1 billion in annual sales. And by 1976, McDonald's had

served over 20 billion burgers, and system wide sales exceeded $3 billion.

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As you can see in this table above, McDonalds market share are way superior than any

of the brand’s competitors. Regarding the competitors, the main ones are Burger King, KFC,

and Wendy’s in the United States.

MARKETING PLAN

PEST ANALYSIS

Pest analysis consider four factors: social, economical, political and technological. This

analysis helps the brand have an overview on the environmental factors and to understand the

situations that the company are in.

Table 1: MCDONALDS’ PEST ANALYSIS

POLITICAL • Foreign governmental conflicts: McDonald’s should fulfill and

respond to certain political laws in all countries. For example,
if the food offered does not abide to the local laws, the
restaurant should shut down.
• McDonald’s is also affected by political relationships between
countries. For example, the relationship between the United
States and Russia or the United Kingdom are still questionable.
And even if McDonald’s is implemented in a lot of countries,
the restaurant is an American company so there are some
complications among countries.
ECONOMICAL • McDonald’s is affected by each and every country’s economy.
If the economy is bad, it obviously will have a negative impact
on the company. The company should choose whether it’ll
purchase the materials needed locally or ship them. The number
of tariffs for imported resources and foreign incorporation taxes
plays a vital role in this decision.

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SOCIAL • Negative image: consumers are seeking healthy food and are
more than conscious regarding their health. So obviously
McDonald’s does not really offer food that is healthy and low
in carbs and sugar. Thereby the company is still trying to have
a healthier menu and meals.
TECHNOLOGICAL • A stronger impact with less technology: technology is a must in
everything, communication, productivity, creativity and
promotion. Technology is used to improve staff productivity,
rebranding and redesigning the brand, advertising meals…

SWOT MATRIX

Table 2: MCDONALD’S SWOT MATRIX

Positive Negative

I
Strength Weaknesses
n

t • Incredible brand value, $126 • Financial deterioration,

e billion. consumer’s dissatisfaction,

r • Best tasting fries in the whole fast mismanagement.

n food industry. • Company depends a lot on

a • A multi-billion empire. the franchises.

l • More than 36000 restaurants in 122 • Dissatisfaction from the staff

countries. and employees due to the

• “Think globally, act locally”. increase of wage limits.

• Backlash from the workforce.

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• Strikes and protests to

increase minimum wage.

E
Opportunities Threats
x

t • Value meals, $1, $2 menus. • Big scandal for not using

e • Innovative products, new “halal” products in Muslim

r menus. countries.

n • Had a great global expansion. • Bad customer service in

a • Important place in the fast certain restaurants in

l food international market. different parts of the world.

• A risky experience with

food contamination.

STP ANALYSIS

McDonald’s uses demographic segmentation that focuses on age, which means, they

are aiming a certain age in their customers. The main target are then children and youth in

general. Children why? Just look at the “Happy Meal” menu with a toy as a gift inside. These

toys became a ritual in the Happy Meal purchase. Children have in their houses, shelves full of

these little toys. Youth why? It is always a pleasure to sit at the McDonald’s restaurant and

share a delicious meal in joy and in a great and entertaining setting.

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Concerning the geographic segmentation, McDonald’s has segmented the world into 4

different markets: the US Domestic Market, the International Lead Markets, the High Growth

Markets and finally the Foundational Markets. The US Domestic market is the national and

local market, that makes more than 40% of the company’s revenue. The International Lead

Market include Australia, Canada, the UK, that makes also 40% of the revenue. The next

segment, the High Growth Markets include South Korea, China, Italy, Spain that only make a

little more than 10%. And finally, the Foundational Markets are areas where the company has

outlets, that makes less than 10% of the company. The company thinks that these last markets

may grow overtime and expand.

Another segmentation strategy McDonald’s use is the division between different types

of customers, based on psychographic characteristics. For example, for customers who seek

healthy food that are lower in fat or for vegan people, McDonald’s provides various meals for

them.

The positioning strategy was outstanding, the company was able to create a unique and

everlasting image of the brand in the consumers’ mind. For instance, the mascot Ronald

McDonald’s is very popular among children. Whenever children think of McDonald’s, the first

thing that comes to their mind is the red-haired clown. The company also made a hit by using

billboards and advertising signage. Moreover, sponsoring events such as the FIFA World Cup,

Olympic and the Little League helped in the promotion of the fast food restaurant.

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MARKETING OBJECTIVES AND ISSUES

McDonald’s goal is to become the world’s fastest and quickest restaurant, while

providing quality, cleanliness, satisfaction, good service and great value. But overall, customer

service is the most important thing for McDonald’s. The company’s principal mission revolves

on a “Plan to Win”. It centers on an exceptional customer experience; the brand is fully

committed to fulfill to improve the customer service. The company works around a 5P’s and

sees in every one of them potential. So, the plan is to improve all of them to become the winner.

McDonald’s, by doing this, focuses on every P and keeps every change or issue relevant.

Furthermore, the “Plan to Win” enables the company to be more flexible, decisive and show

more interest in customers’ needs and demand.

However, McDonald’s is facing issues reading poor management, lots of rivals and

competition. Even if going global and expanding was and is a goal for McDonald’s, the process

is still quite risky and critical. The company encountered problems mostly with its franchises

around the world. The relationship between the company and its franchises is all about conflicts.

Especially during this post-pandemic period.

MARKETING MIX STRATEGY

• McDonald’s Product Strategy:

McDonald’s main products are burgers, desserts, fries, beverages, ice creams, chicken,

salads, coffee, milkshakes and breakfasts. The company provides a large variety of products to

satisfy each and every consumer. Also, McDonald’s offers their products in such unique

packaging, which makes the experience nonesuch. And to obtain more and more recognition,

the brand had to adapt and customize to the local culture of each and every country. For

example, in the case of Morocco and other Arab countries, McDonald’s had to create a whole

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new menu according to the customers with new burgers related to Arabic flavors (the

McArabia).

• McDonald’s Place & Distribution Strategy:

The company seeks and implement the restaurants in areas of high-end consumers like

airports, shopping malls or even main streets. McDonald’s locates near its main competitor

Burger King. McDonald’s also offers services online with delivery. Moreover that, the places

where the company locates the restaurants has an impact on the prices and also the type of

consumers targeted. When implementing a place, McDonald’s considers the people, place and

also takes into consideration the competitors place.

• McDonald’s Pricing Strategy:

McDonald’s pricing takes into consideration a lot of factors: competitive nature, the

company has a range of rivals to they have to set the best prices to become the market leaders.

The cost of their products depends on the targeted consumer. There are a wide range of products

going from $1 to more depending on the needs of the consumer. However, some consumers

don’t really look at the prices because they only seek for great service and good quality.

• McDonald’s Promotion:

McDonald’s relies a lot on communication and promoting the brand worldwide. McDonald’s

owes its notoriety to its incredible communication strategy. The brand devotes 5% of its

turnover into advertising, whether it is on billboards, on TV, magazines. Furthermore,

McDonald’s promotions represent a “brand globally, advertise locally”, which means that their

communication strategies are adapted according to the different markets they are targeting.

Much like the golden arches, the famous slogan “I’m Loving It” is another part of McDonald’s

promotional strategy. It is used in every campaign and also on the burgers packaging. The goal

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behind this slogan is to convey the same message all over the world, the love for McDonald’s

and also the happiness that we feel while consuming their products.

RECOMMENDATIONS

Good amount of reports clarified that eating McDonald’s is really bad for our health.

And it’s obvious because its junk food manufactured. These kinds of food are especially

harmful for us, but McDonald’s is not the only one who prepares unhygienic food. Most fast

food chains use excessive sodium, fat, acids and sugar. Which can cause obesity, puffiness,

high blood pressure and health complications in general. But the problem is that even if

consumers are aware of these complications, they still are addicted to the taste and became

dependent.

But McDonald’s is able to change this. Under the pressure done by all the lawsuits

claiming obesity caused by the food offered by McDonald’s, the company have to make efforts

to fight this health problems: lowering salt in fries, adding fruits in meals, having a lot more

choices in salads menus. Create nutritional meals to reduce the risks of food contamination and

health complications. McDonald’s need to change the core ingredients of their products to make

them tastier and healthier, reduce the amount of fat, sodium and all those harmful products and

acids, avoid fried food. These strategies will even become marketing tools because it’ll help the

company have a strong and positive impact on the fast food market. Therefore, the firm will

find a way to improve its image as a healthy restaurant.

McDonald’s can also work on the packaging and the image it has. For instance, the

Happy Meals aiming children can be carried out with a new design that will lead to a desire to

eat healthy food. Since children are the best consumers and the easy target. Thus, to make its

customers satisfied and wanting to maintain a great relationship, the company should raise the

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standards higher by introducing products that are not harmful and that don’t cause health

complications.

CONCLUSION

To conclude, McDonald’s became one of the most successful food chain restaurants in

the whole world by implementing various methods and marketing strategies. This whole

process made McDonald’s enter into a global expansion in different markets. The company

would surely not become the greatest leader of the fast food chains without using all these

marketing strategies, such as, standardization, all types of segmentation, targeting, adaptation

to the local cultures. But all of this success is thanks to globalization and the capacity to

expand the brand on a worldwide scale, making it the first ever fast food restaurant.

REFERENCES

“McDonald’s towards healthier menus”

https://www.nytimes.com/2013/09/27/business/mcdonalds-moves-toward-a-healthier-

menu.html

“dangerous side effects eating McDonald’s” https://www.eatthis.com/news-dangerous-side-

effects-eating-mcdonalds-every-day/

“why is eating McDonald’s bad for health https://uk.blastingnews.com/food-and-

wine/2016/08/here-is-why-eating-at-mcdonald-s-is-bad-for-health-001083227.html

History of McDonald’s https://en.wikipedia.org/wiki/History_of_McDonald%27s

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“Our history” McDonald’s https://corporate.mcdonalds.com/corpmcd/our-company/who-we-

are/our-history.html

Perner, L 2008, The Marketing Mix: Product. Web.

https://freebooksummary.com/marketing-report-on-mcdonalds

« Challenges faced by McDonald’s » https://rejournals.com/the-challenges-facing-

mcdonalds/

“Issues faced by McDonald’s “ https://www.ukessays.com/essays/marketing/issues-faced-by-

mcdonalds-marketing-essay.php

APPENDICES

Table 1: MCDONALDS’ PEST ANALYSIS

POLITICAL • Foreign governmental conflicts: McDonald’s should fulfill and

respond to certain political laws in all countries. For example,
if the food offered does not abide to the local laws, the
restaurant should shut down.
• McDonald’s is also affected by political relationships between
countries. For example, the relationship between the United
States and Russia or the United Kingdom are still questionable.
And even if McDonald’s is implemented in a lot of countries,
the restaurant is an American company so there are some
complications among countries.
ECONOMICAL • McDonald’s is affected by each and every country’s economy.
If the economy is bad, it obviously will have a negative impact
on the company. The company should choose whether it’ll
purchase the materials needed locally or ship them. The number
of tariffs for imported resources and foreign incorporation taxes
plays a vital role in this decision.

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MKT3130

SOCIAL • Negative image: consumers are seeking healthy food and are
more than conscious regarding their health. So obviously
McDonald’s does not really offer food that is healthy and low
in carbs and sugar. Thereby the company is still trying to have
a healthier menu and meals.
TECHNOLOGICAL • A stronger impact with less technology: technology is a must in
everything, communication, productivity, creativity and
promotion. Technology is used to improve staff productivity,
rebranding and redesigning the brand, advertising meals…

Table 2: MCDONALD’S SWOT MATRIX

Positive Negative

I
Strength Weaknesses
n

t • Incredible brand value, $126 • Financial deterioration,

e billion. consumer’s dissatisfaction,

r • Best tasting fries in the whole fast mismanagement.

n food industry. • Company depends a lot on

a • A multi-billion empire. the franchises.

l • More than 36000 restaurants in 122 • Dissatisfaction from the staff

countries. and employees due to the

• “Think globally, act locally”. increase of wage limits.

• Backlash from the workforce.

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MKT3130

• Strikes and protests to

increase minimum wage.

E
Opportunities Threats
x

t • Value meals, $1, $2 menus. • Big scandal for not using

e • Innovative products, new “halal” products in Muslim

r menus. countries.

n • Had a great global expansion. • Bad customer service in

a • Important place in the fast certain restaurants in

l food international market. different parts of the world.

• A risky experience with

food contamination.

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