Introduction
McDonald’s is one of the best-known brands across the globe. It has constantly built its brand by listening to its customers and responding effectively. The corporation has used its brand reputation to open several local and international outlets (McDonald’s, 2022). However, McDonald’s faces a number of issues in marketing, management, and product. In all its market, the company experiences stiff competition from other businesses. In addition, the organization finds it challenging to understand its customers. McDonald’s continues to suffer from a bad food image for its products. The corporation faces high employee turnover in its management, a slow adoption rate, and disagreement with shareholders regarding diversity policies. Although the company has shown tremendous performance, it is not devoid of challenges.
SMART Objectives of The Marketing Plan
Marketing plan objectives consist of a series of steps that must be taken to reach the overarching goal of marketing. They enable an individual to develop a cohesive way of attaining the goals. For McDonald’s to succeed, it should develop techniques for addressing the problems. For example, there is a need to make sure that the corporation achieves a competitive advantage. The following are some of the objectives of the marketing plan:
- To reduce employee turnover rate from 130% to about 15% by 2024. This will enable the corporation to solve some challenges of high employee turnover, such as losing good talents.
- To develop a positive food image by producing foodstuffs deemed healthy using organic raw materials by 2023. This will enable the corporation to foster trust with customers from across the globe and ultimately leads to an increase in sales.
- In the next one year, McDonald’s should gain a competitive advantage over its rivals in the market through cost leadership
- Develop policies that meet the needs, including the shareholders, in six months. This is likely to develop a positive relationship between the corporation and shareholders.
Marketing Strategy
Table 1: Ansoff Matrix
Market Penetration
McDonald’s will adopt several approaches to enhance its existing products in the market. However, marketing these products has been an issue due to increasing perception that they cause health problems such as obesity, especially among young people (Bragg et al., 2018). To penetrate the market, the corporation will dispel the notion by labelling all the contents used for every product. This will be accompanied by health information to inspire the customers to make healthy choices. Some messages include “good food choices are good investments” and “you are what you eat, so do not be cheap and fake.” In addition, the corporation will control the amount of food products a buyer can purchase and consume. This strategy will have some risks like reduced sales due to purchase control.
Product Development
McDonald’s Corporation has always given its customers new things to try. It has always given its customers a nice amount of consumer economic surplus. However, to grow its market and achieve a competitive advantage, McDonald’s will look for new ideas and products in one market and then bring them to the rest of the world (Bragg et al., 2018). In addition, there is a need for the corporation to adopt cost-effective products. This strategy has a low level of risk and has always worked well for the corporation in serving its million customers, on average, every day. The secret to the success of McDonald’s is its growth strategy. As a result, improving the value of its existing products will be fundamental to attaining a competitive advantage.
Market Development
Developing new markets to retail existing foodstuffs is a crucial growth strategy for increasing the level of competitiveness. McDonald’s main strategy is to move into new markets in various parts of the world. The company has stores in more than 121 countries and will need to open more outlets in regions they have not explored (McDonald’s, 2022). This will help the organization promote its existing products in new markets by letting third parties set up franchises that sell its products and use its brand name. However, the approach is a high-risk due to the failure of the organization to perform effectively. This is because the opening a new store in an unfamiliar region is always risky. Despite the challenge, the strategy will allow the company to enter new markets and bring in more money successfully.
Diversification
Diversification involves developing new products to sell to new markets that were not previously addressed. It is among the strategies that will enable McDonald’s to mitigate the impact of a bad food image in the market (Bragg et al., 2018). Customers are becoming more conscious of what they eat, and a negative perception of the corporation’s products is unsuitable for survival. Based on this, McDonald’s will introduce air-fried French fries to the market and provide local foods to support cultures. The strategy will enable the corporation to counter the negative image of its products. However, the technique is considered the riskiest low return on investments due to product failure. Therefore, the strategy will be conducted after an extensive feasibility study to reduce the risk.
Marketing Mix
Product
Product is the physical product or service offered by the corporation. As shown in figure 1 below, the product consists of different foods and services offered by McDonald’s. The company is among the best fast-food chains in the world. Its primary products are mostly hamburgers, chicken, cheeseburgers, soft drinks, and sweets (Gurumoorthy and Santhiya, 2019). In addition, McDonald’s now has salads, smoothies, fish wraps, and fruits on its menu. All of these are part of the product strategy in the marketing mix. When McDonald opened their first restaurant, it only sold hot dogs, hamburgers, cheeseburgers, milkshakes, and French fries. These products enable the corporation to meet different customers across the globe.
McDonald’s products are essential tools that can be used to achieve a competitive advantage. Firstly, the corporation will develop its products to perform effectively in the market (Gurumoorthy and Santhiya, 2019). It should maintain being the market leader by fixating on low-cost, high-quality meals and a nice place for everyone to hang out. Secondly, the corporation will need to improve its products by producing healthy products. They will ensure that all foodstuffs in their stores do not harm consumers. For example, they will major in organic products and make sure their foods do not have excess calories. Therefore, it will be important for McDonald’s to focus on healthy foods to restore its image and attract customers, especially health-conscious ones.
McDonald’s (2022)
Pricing Strategy
McDonald’s uses pricing strategies that make its products seem affordable to customers so they will buy more. They cut prices in India by almost 25% to ensure that people would rather eat lunch and dinner at McDonald’s. KFC, Subway, Pizza Hut, and Dominos are some of its main rivals (Pradhan, 2018). As part of its promotional pricing strategy, McDonald’s offers different menu items at a discount. Their pricing strategy is also set up to attract people in the lower middle class. Most McDonald’s customers are young teens who care about brands and want things to be easy (Gurumoorthy and Santhiya, 2019). With the rise of home deliveries, there are also more ways to save money on the total bill.
Moreover, McDonald’s pricing strategy has two components to help achieve a competitive advantage. One of the techniques used by the corporation is the bundle pricing strategy. In this case, McDonald’s offers meal deals and other bundles of food cheaper than buying the items separately (Gurumoorthy and Santhiya, 2019). The other pricing strategy employed by the corporation is psychological pricing. The main intention is to create a perception that the products are affordable. However, McDonald’s will need to focus on low pricing by reducing the cost of production. This will give the company a competitive advantage because most customers are price conscious.
Place
The choice of a place is integral for the effective performance of an organization. McDonald’s has a mixed system of company-owned and franchised restaurants. The company has more than 38,000 outlets in more than 100 countries (McDonald’s, 2022). Customers can either go to these places to eat or get food. They are mostly about restaurants. Families tend to go to the outlets because they have exciting things for kids to do. McDonald’s website lets customers order food online to ensure they can keep up with the digital age (McDonald’s, 2022). The company also partnered with some of the best online food delivery services. The outlet is set up temporarily at events like sports games, holiday celebrations, festivals, concerts, and many more.
Promotion
McDonald’s continues to make its marketing strategy unique for each country, taking into account the different cultural and other differences that each country has. In that situation, the food company looks at what people think about its products, their use, and their ethnic, moral, and religious backgrounds (McDonald’s, 2022). McDonald’s has different marketing plans in different countries. Recently, the corporation has been working with digital experts to create a special month-long meal campaign for its fans. They use traditional ways to market, like ads on TV, radio, and in newspapers. As shown in the figure, they use social media sites like Instagram, Facebook, and Instagram to advertise online (Monty Verdi, 2022). Therefore, they talk to their customers and keep them up to date on what’s happening in the company.
Monty Verdi (2022)
Customer Driven Strategy
Segmentation
Targeting
Target marketing is an approach that majors on satisfying client needs and desires. It is a customer-focused strategy that increases consumer loyalty. For example, McDonald’s corporation has effectively employed a differentiated market segmentation approach by targeting households, particularly children (Czinkota et al., 2021). It talks about how to develop marketing messages that make products stand out from those of the competitors in the minds of the target customers. Differentiation is crucial for building a strong business, especially in a very competitive fast-food industry. Prior to opening a fast-food shop or franchise or buying into one, the corporation should think about how to set itself apart from local rivals and chain restaurants.
Positioning
Positioning involves choosing the parts of the marketing mix that work best for a certain group of customers. This is done by changing the 4Ps of the marketing mix, and the positioning matrix shows which combinations make the most sense. McDonald’s uses an adaptive type of product positioning to re-purpose its products and services regularly to maintain the changes in the market (Czinkota et al., 2021). For example, the corporation has posited itself as the best fast food due to its consistency in the market. In addition, McDonald’s claims it is a people-based company selling burgers instead of a burger company serving people. Therefore, the corporation is known to be people-centric because they listen more to customers and respond to enhance satisfaction.
McDonald’s continues to offer value through its products to achieve a competitive advantage in the industry. It provides high-value offerings at affordable prices to ensure customers get what they need (Czinkota et al., 2021). The corporation understands that customers are price sensitive and can be attracted and maintained when the products are quality and pocket friendly. In addition, McDonald’s has made its products more nutritious due to its innovation capabilities. They have intended different techniques to increase the product’s value by increasing prices. Based on this, the organization will need to continue re-inventing other approaches to reduce production costs to lower prices. The company’s positioning strategy is integral because it promotes growth.
Differentiation
McDonald’s has differentiated itself from the others by focusing on providing low-cost products. As a result, the low-cost leader is probably safe from attacks from rivals. The corporation uses product differentiation to meet the needs of its customers and compete effectively (Czinkota et al., 2021). As a result, businesses need to follow the low-cost leadership strategy, which leads the business to make a product differentiation strategy. Competitive advantage must be maintained to ensure that businesses do not fall behind because their competitors have high barriers to entry. This can be done by going beyond milestones to change and improve themselves into completely innovative businesses with the help of protected intellectual property and unique distribution channels.
Conclusion
Despite McDonald’s being a well-known brand worldwide, it must adopt strategies to mitigate some of its issues. It has always built its brand by paying attention to its customers and giving them what they want. The company has used the reputation of its brand to open several stores both locally and abroad. However, McDonald’s has problems with marketing, management, and its products. In every market it works in, the company faces tough competition from other companies. In addition, the organization has a hard time getting to know its customers. When managing the business, the company has to deal with a high turnover rate of employees, a slow rate of making changes, and disagreements with shareholders over diversity policies. Even though the company has done a lot of good work, it still faces problems.
Reference List
Bragg, M.A., Roberto, C.A., Harris, J.L., Brownell, K.D. and Elbel, B. (2018) ‘Marketing food and beverages to youth through sports’, Journal of Adolescent Health, 62(1), pp.5-13.
Czinkota, M.R., Kotabe, M., Vrontis, D. and Shams, S.M. (2021) Marketing management. Springer, Cham.
Gurumoorthy, T.R. and Santhiya, M. (2019) ‘Marketing mix in global market’, Advance and Innovative Research, 6(2), p.15.
McDonald’s. (2022) Who we are.
Pradhan, S. (2018) ‘McDonald’s India–plotting a winning strategy’, Emerald Emerging Markets Case Studies. 8 (2).
Wu, Y. (2022) 2022 7th International Conference on Financial Innovation and Economic Development (ICFIED 2022). Atlantis Press.