The original McDonald’s in San Bernardino was owned by brothers, Dick and Mac McDonald, however, the success of the chain lies with Ray Kroc, a travelling sales man who in 1954 visited the brother’s restaurant and was impressed by how efficiently the restaurant had been run by having a few items on their menu, therefore allowing to focus on quality, hence Kroc’s most famous quote “If I had a brick for every time I’ve repeated the phrase Quality, Service, Cleanliness and Value, I think I’d probably be able to bridge the Atlantic Ocean with them.” So impressed, he quickly pitched his vision of opening McDonald restaurants all over the US to the McDonald brothers, and in 1955 founded the McDonald’s Corporation, buying exclusive rights to the McDonald’s name in 1960. Today McDonald’s is a world-renowned brand serving 69 million customers daily in 119 countries.
Part A
According to Jobber and Ellis- Chadwick, ‘segmentation provides the basis for the selection of target markets’. Segmentation is an important part of strategic marketing plan as it helps identify the differences of customer’s needs based on a variety of factors which helps companies target the best users for their product. (Filip and Ploesteanu 2009). McDonald’s believe themselves to be a family friendly restaurant and so they segment their market demographically to focus on children/ youth and the working-class family. Market research carried out by McDonald’s states that they believe parents should use McDonald’s as a treat and parents/ teenagers are particularly attracted to the saver menu.
McDonald’s target a niche market
McDonald’s recognises their large customer base of working class families and therefore tries to attract these customers by providing need for cheap food that children will enjoy. They have therefore reasonably priced their Happy Meals at £2.39, all of which will include a toy that children will want to play with. For adults and teenagers, McDonald’s has a wide range of classic meals which are quite affordable with their saver menu ranging from £1.09 to £1.55 in price and meals starting from £2.59.
They want to make their restaurants as comfortable as possible for families with children and young people. They therefore ensure they have plenty of seating and have recently updated the inside of their restaurants to have a more modern theme and as part of this has installed iPads to entertain children while eating. McDonalds has also recognised that business customers are another key client and support this by providing free Wi-Fi to allow customer to continue with work.
Convenience food is a large part of McDonald’s as they realise not all families will want to sit in their restaurants but parents will still want to treat their children, therefore many McDonald’s have put in place drive throughs to allow customers to take their food away and eat in a more suitable place for them.
McDonald’s prides themselves on being family friendly and want to remain appealing to young children. They have managed to this by giving children a free toy in their Happy Meals and by also running family fun days on weekend where children have the chance to get their face painted, get some balloons and even have a chance to meet McDonald’s mascot, Ronald McDonald.
Part B
Price
Jobber and Ellis Chadwick (2016) believe that price is a key element to the marketing mix as it represents on a unit basis what the company receives for the goods being marketed. As McDonald’s target their Happy Meals at children and teenagers, they need to ensure that their prices are kept low to remain affordable for their target age range. However, in McDonald’s marketing publication, they speak on how cautious they must be when pricing as “using low price as a marketing tool is that the customer may feel that a low price is indicative of compromised quality”.
Promotion
Promotion “involves communication with potential customers to encourage them to buy the product or service” (Bishop 2002). McDonald’s recognise that not all customers will remain long term and so promotion is key to retain customers. One way this is carried out in McDonald’s is using advertising. McDonald’s make their TV advertisements visually appealing to children and chose to showcase these adverts during day time on children programmes to ensure their target market are viewing these ads. As well as using TV, they also show their advertisements in cinemas and online where they know it will be viewed by children and their parents.
McDonalds also state that they use other promotional methods to retain their customers. Bhasin talks on how small toys are given to children along with their happy meal. The toys are often changed to keep children entertained. To keep parents interested, McDonald’s run various competitions and scratch cards to give them the chance to win meal.
Place
Place is consistent of two parts; channel of distribution and market logistics. The channel of distribution is the path “through goods travel from the vendor to the consumer”. McDonald’s aim to open franchises where they know there will be a demand, therefore they aim to open alongside busy roadsides and place their logo to be seen from a far distance, therefore encouraging parents to impulse buy a Happy Meal for their children. Market logistics will involve moving inventory from warehouse, to franchise and ultimately customer, therefore all McDonald’s restaurants are placed alongside good transportation links.
Physically, McDonald’s see themselves as a family friendly restaurant and want to be welcoming. They have started the process of updating their restaurant looks by making it more modern and convenient for busy parents who want to be served quickly. They have introduced a new system allowing parents to place their orders on the system without needing to talk to a cashier and their food being brought to their table. This is especially useful for single parent families.
Product
“One of the aims of McDonald’s is to create a standardised set of items that taste the same whether in Singapore, Spain or South Africa” (Vignali, 2001).
One of the main original features of McDonald’s was to provide customers with a select few options, however, regular market research is carried out and this has allowed McDonald’s to alternate their product to what is fashionable in today’s terms.
To maintain sales, McDonald’s often introduce limited editions of certain products, take for example the McFlurry which is quite popular amongst children and young people regularly update their flavours in accordance to the time of year, take for example Cadbury’s Cream Egg flavour is introduced at Easter time at a higher price as McDonald’s know there will be a high demand for it.
‘Product life cycle is the cycle through which every product goes through from introduction to withdrawal or eventual demise.’ (Economic Times)
Product life cycle is extremely important to McDonald’s as they continuously need to ‘introduced new products and phased out old ones over time’ (McDonald’s Marketing) Other examples of how this is done include introducing American themed burgers. Promotion is a key partner with product, especially when it comes to introducing a new product as awareness needs to be raised during the introduction stage and maintained through the growth and maturity stages.
diagram of product life cycle (Sharma, Your Article Library)
Conclusion
It is evident that marketing is a key part to McDonald’s survival. The have successful managed to segment their market and effectively use the marketing mix to appeal to their target customers. While McDonald’s may have a bad reputation amongst some due to being a fast food restaurant, they have been able to advertise positively to attract a customer base and with continuous market research they will be able to please these customers in order to gain loyalty.
2023 update:
Some information in this essay may require updating, particularly regarding McDonald’s marketing strategies and tactics since the essay was written in 2016. For example:
- Digital Advertising: McDonald’s has increased its investment in digital advertising and has been using various forms of online advertising, such as display ads, video ads, and social media advertising, to reach its audience. McDonald’s has also been investing in programmatic advertising, which uses data and algorithms to target ads to specific audiences.
- Social Media: McDonald’s has been using social media platforms, such as Twitter, Instagram, and Facebook, to promote its products, engage with customers, and run marketing campaigns. McDonald’s has also been using social media influencers to reach younger audiences.
- Mobile Apps: McDonald’s has been promoting its mobile app, which allows customers to order and pay for food, and offers exclusive deals and discounts. McDonald’s has also been using push notifications to promote new products and offers to app users.
- Sponsorship and Events: McDonald’s has continued to sponsor major events, although dropping the Olympics in 2017, and has been using sports sponsorships to promote its brand. McDonald’s has also been involved in various community events and initiatives.
Traditional Advertising: While McDonald’s has been increasing its investment in digital advertising, it has still been using traditional advertising channels, such as TV, print ads, and billboards, to reach a broad audience.
Overall, McDonald’s has been using a mix of traditional and digital marketing channels to reach its target audience and promote its brand and products.