Marketing Strategies of McDonald's: A Case Study

This document provides a case study on the marketing strategies of McDonald's, including an overview of different marketing processes and the impact of marketing on other functional departments. It also discusses the value and significance of marketing role and the application of the 7Ps in the marketing planning process.

MANAGEMENT

Contents
Introduction................................................................................................................................2
Introduction to the concept of marketing that includes current as well as future trends...........2
Overview of Different marketing processes..............................................................................3
Situational Analysis...................................................................................................................3
Roles and responsibilities of the marketing manager................................................................4
Impact of marketing on other functional departments...............................................................5
Value and significance of marketing role..................................................................................6
Conclusion..................................................................................................................................6
Application of 7`ps to marketing planning process...................................................................6
Developing and evaluating the marketing plan..........................................................................9
Conclusion................................................................................................................................11
References................................................................................................................................12

Introduction
McDonald’s is the most renowned fast food restaurant, which started as a Hamburger joint
and later it initiated offering cold drinks, French Fries, and ice cream. McDonald’s is one of
the fourth largest employee concerned company. Currently, business quarterly employs
around 1.9 million all over the world. The union of its resources gives it a huge brand name
to the organisation that further assists in marketing. McDonald’s food chain have been
ranging in around more than 100 countries in the whole world where 80% of the channels
rely on franchise model. Although, this sector of informal eating out segment attracts huge
competition and still growth and the market is able to induce the customers to around 36000+
stores. The company has generated a revenue of-
2014 2015 2016 2017 2018
0
5
10
15
20
25
30
"Revenue"US$
(Source: Statista, 2018)
Introduction to the concept of marketing that includes current as well as future trends
McDonalds is a world market lead that has definite goals which struggles to attain 100%
customer satisfaction that enabled it to increase its market share and optimise in order to
reduce costs. The current strategy of McDonalds aims to reach its customers that includes
concern regarding healthier foods, food quality and nutrition, restaurant diversity, larger

menu, and finally positioning the brand. To handle changes in trends and concern towards
healthier food, McDonalds have changed the way it prepare the food. It ensures that it uses
100% vegetable oil, less amount of sodium and low fat milk for the milk shakes (Armstrong,
Kotler, Buchwitz, Trifts, and Gaudet, 2015). The quality as well as the safety are of
paramount significance in McDonalds. Moreover, it can be achieved with strict and higher
product quality, strict enforcement for the operating procedures and maintain a close
relationship with suppliers. McDonald’s targets to achieve other important expectation from
customers. In order to accomplish the expectations, the company has introduced the breakfast
menu with wide variety of food products (Payne, Peltier, and Barger, 2017). Apart from this,
restaurants have become customised and their menu would confirm as per taste and
preferences of the people in that particular location. With a view to position the market,
McDonald’s positions sponsor events and sports and events such as dome`s community
programme and child safety week (Karjaluoto, Mustonen, and Ulkuniemi, 2015).
The company is no longer relying on traditional and TV advertising; the company has opted
for more holistic digital strategy in order to capture the attention of “Y” generation people.
Overview of Different marketing processes
While going through the different marketing processes, it is seen that overview considers
situational analysis as an important component. As the company is successfully widely
spread over several businesses in distant countries of US and other European country. The
company is maintain its reputation as it is able to progress strong market development and an
organised management (Bredbenner, Delaney, Biggers, Koenings, and Quick, 2017).
Situational Analysis
This analysis is a significant part of the business to grow. Every internal and external
environment in regards to the employee`s performance, managerial body, and efficiency with

the same value. Whereas, rivalry and external threats at the marketplace should be analysed
in order to serve the customers with the superiority services (Devia, Aisjah, and
Puspaningrum, 2018).
Outline of the market- the market should be examined based on price, competition, and
product availability. The situation of the corporation and its point at the marketplace should
be analysed well and McDonalds have an optimistic position in regards to this (Olson, Slater,
Hult, and Olson, 2018).
Competition analysis- High competition suggests that the rivalry between several
organisations. Market competition and external threats can put the company back (Telfer,
2018).
Objectives and goals
Goals and objectives should be determined enough and should have fixed and greater
insights. While regulating resources and capital in a positive way that has to be created to cast
a reasonable brand on customers. Providing the appropriate products at an appropriate price
drives the customers to take concentrate in the organisation.
SWOT analysis- the crucial plans and strategies led and enforce a company to become unique
where stands SWOT for Strengths, Weaknesses, threats and opportunities. Several factors
that threaten the business environment directly affect the success of the organisation.
The five forces Porter`s model undertakes an analysis of competitive positioning. Some of the
important five elements of this model includes risk of rivalry, new players, bargaining
influence of consumers, bargaining power of suppliers, and the warning of alternatives.
Competitors such as burger king, Dominos, KFC, and Wendy’s that indicates competition is
being growing intensely. With so numerous illustrious fast food corporations, new entrants is
not a major threat as McDonalds enjoys an advantage over its entrants for the goods. In the

supply segment, corporation does not only have solo supplier at worldwide level. There exist
higher opportunities of healthy replacements that pose a threat to organisation. McDonalds
concentrates on health side by concentrating on healthy food items in menu, so there still
exist threat of substitutes.
Key Roles and responsibilities of the marketing manager
Key roles of marketing function includes-
Formulation of marketing strategies- the main function of marketing function of McDonalds
is to form strategies, represent progress of marketing tactics, and plan. A manager conducts a
research on customers and recognises the need to fulfil the needs of the customer with their
products and services. By initiating the improvement of marketing strategies, a marketing
function is able to create a stability between organisational purposes and the existing
opportunities (Menon, Bharadwaj, Adidam, and Edison, 2015).
Checking the marketing environment-, marketing function plays a significant role in finding
new expansions scopes for McDonalds in the business environment, certain development
provide productive responses to the progress of new product and services. These new
development activities include changing market traits, internal, external changes of political
and legal market, and socio-economic forces (Samson, 2018).
Conduct Market research- Marketing research is a major part as well as hero of marketing
manager as it identifies the needs of eating preferences of McDonald’s customers. Research
includes detailed facts regarding creation, value and the customers so that it can communicate
finest products and facilities in marketplace.
Market segmentation- In the time of identifying appropriate audience to target them has
become main role of marketing manager. As globalised market is highly volatile, as
organisations needs accurate segmentation that has been provided by marketing. It can help

the organisation to identify the customers in large varied market and in order to promote
goods and services among them. For example- In order to serve each segment that has been
divided into smaller customer groups, McDonalds often changes its activities according to
geographical areas such as Europe, Africa, Canada, America, and Asia. Activities such as
introduction of McVeggie and Aloo tikki burger available in India. McArabia chicken and
Beef Burger are availed in Arabian countries.
Impact of marketing on other functional departments
Marketing functions are surrounded by numerous diverse functions such as distribution
system, finance, and promotion but these events are under the procedure of marketing
process. Below is the elaboration of how each functional department of the organisation is
related to marketing function-
Production- Marketing function enables to understand the customer preferences that regulates
the production (Harrington, Ottenbacher, and Fauser, 2017). McDonald’s use beef, chicken,
potatoes, milk, and bread for their production. Big Mac is the basic food that has offered by
McDonald’s.
Operations- the operational department of McDonald’s regulates franchising and supply
chain of restaurants. Operational department supports franchisees in every aspect. Below is
the process of manufacturing the “bun.” This process is followed only after the organisation
gets to know of the customer preferences.

(Source: Warren, 2017)
Finance- the finance department reflects marketing function that how their promotional
strategies help to generate revenue (MBAskool, 2019). Finance department set a particular
budget for promotional activities such as online advertisements, sponsor projects, and TV
adds and pass it to marketing department to act accordingly. Marketing function includes
financial development, identifying the sales, and distribution e-mail. The planning
department uses definite timeline in order to plan certain approaches to focus on
organisational goals. Marketing helps to create and build brand image among the
stakeholders that induce them to invest in the organisation. Winning attitudes of customers is
effectiveness of marketing.
Sales- The major impact of marketing is on sales and the volume. Effective marketing will
lead to the increase in sales, as it will induce the customers to buy the product. Marketing
aids to increase the profitability of the organisation through maximum sales.
Value and significance of marketing role
Marketing functions are very much linked and related to various departments of the
corporation. Every marketing function requires correct description starting from the
fabrication services of the goods and amenities of the organization in order to deliver

promoting plan. Apart from this, it requires human resources and work force from HR
department through recruitment and selection, economic conditions help from finance
department, and the logistics and other distribution services from distribution system etc
(Silva, and Casas, 2017). The process of marketing wants have to be conversed and
sponsored by the other several divisions of the corporation. If marketing functions are not
known very well in regard to the inventory of raw constituents or the production volume of
the enterprise, then marketing plan will consequence into unnecessary blunders and losses
(Taecharungroj, 2017).
Conclusion
From the basic structuring of marketing, it has been seen that Marketing is an important part
of functional activities and each activity is directly or indirectly connected to the success of
the organisation.
Application of 7`ps to marketing planning process
7P`s McDonalds Subway
Product McDonald’s provides
several business services,
the company has a product
mix which is made up of
beverage also food products.
Effectiveness -Undoubtedly,
McDonalds is most
profitable and subway is
leading. The company`s
Whereas no other
competitors offer this wide
range of products. For
example- Subway mainly
offers submarine sandwich
and it offers a chance to its
customers to fill their sub.

effectiveness is due to its
“product” marketing mix.
Price customers can also buy
happy meal or also an extra
value meal (small drink,
cheeseburger, and fries) in
order to optimise the value
of cost and product.
McDonalds use
psychological pricing that
induces the customer to
think of its products that are
comparatively cheaper.
Subway is a premium-priced
because it represents distinct
differences such as it does
not uses high-quality
material. The company
uses a mixture of pricing
strategies such as Price
tactics and psychological
pricing strategy. In the
bundle pricing strategy, the
company offers meals and
other bundles of product,
which are discounted.
Place Places include restaurants,
McDonald’s mobile
application, Kiosks, and
Postmates application and
websites. Its restaurants are
among the most of the sales
revenue. Some restaurants
manage Kiosks in order to
retail a limited assortment of
various goods such as
Some of the subway`s
restaurant places are
airports, business centres,
amusement parks, shopping
centres, and shopping malls.
It finds difficulty to allot
franchisee as it has suffered
from it.

sundae. It is observed that in
case of Kiosks, the company
uses professional sports
races and other seasonal
occasions. This element also
includes mobile application
of company.
Promotion McDonalds is benefited as it
attracted kids by its clown.
Advertisement is one of the
notable promotional tactics
used for McDonalds.
Subway lacks promotional
activities in regards to kid`s
segment due to its menu.
People Organisation includes
management, customer
representatives, and
employees, etc. Most
importantly, who runs the
organisation, manages it,
and represents the
organisation and this is the
reason why it is important to
maintain HR.
Subway has a long history
of poor relations especially
in regards to franchisees.
Sales have fallen for three
years where traffic was
again down 25 percent since
2012.
Process McDonald's is the renowned
and major food destinations
among numerous people in
It starts from finding the
bread and type of sandwich
to be prepared. F0r instance-

the whole world, and in his
way they offer varied
selections to the public.
cheese will be added in
chicken tikka. Then a bill is
processed in the name of
client.
Physical evidence McDonald's deals the huge
variety of goods to the client
with very paced-up service.
The company has above
than 36,000 in-stores all
over the world.
Subway suffers from how
seating arrangements look
like, how stores actually
looks like. Restaurant
website looks good and it is
even user friendly.
Product represents product-mix that covers various organisational outputs especially in
regards to target market. The main product line covers Hamburgers, sandwiches, beverages,
snacks, sides, salads, fish, and chicken, deserts, and shakes. McDonalds have “Mc” in front
of many products named as “egg Mcmuffin or Mcflurry” that makes it product`s specific and
exclusive that is difficult for other competitors to imitate. Product is a important element of
McDonald’s brand. It represents company`s image. Slowly, the business is expanding its
product-mix and for now customers purchase several products such as fish, desserts, chicken,
and breakfast meals. While expanding the product lines, the organisation is able to satisfy its
customers because it modifies its international menu according to country that can suit the
preferences of the customers. For example- McDonalds also offer beer in Germany and
different soups in Asia. While considering the risk, more varied product mix decreases the
McDonalds dependency on only few market segments (Bhasin, 2018).
Related price ranges from corporate`s food to beverage goods. Although, pricing strategies in
burger king, and KFC is quite similar because of similar quality of products. The objective of

pricing to decide the consideration in order to maximise the profit margins and sales volume
at the same time. For instance- Whereas, on the other hand, in psychological pricing where
the organisation uses the pricing which appear to be more affordable. This pricing strategy
will encourage the customers to purchase the organisation`s perceived price as per the
affordability (MEYER, 2018).
This element includes venues and locations where the products are actually offered and
clients can easily contact them. These created effective place from wherever the consumers
can contact the information regarding company`s products and purchase the products. For
instance- the mobile application for company iOS and Android system allows the customers
to claim special deals. On the same side, finding the same restaurant locations, pay for place
orders that involves participating McDonalds restaurants (Clark, 2018).
Component of marketing mix that describes many strategies for the business so that it can
communicate with the customers. This creates marketing communication plans in order to
consider the target clients. For instance- Organisation provides new figures in order to induce
customers to buy new goods. The company uses following promotional mix that are arranged
as per the significance in business such as Advertising, public relations, direct marketing, and
sales promotions. Apart from this, the company uses sales promotions, and public relations in
order to draw more customers towards the organisation`s food chain. For instance- the
company offers discount coupons for specific product and product bundles with a way to
attract more customers. Company`s unrestricted relations activity helps the organisation to
promote the business to target market with the help of goodwill and strengthen the brand.
People is amongst the important essentials of the marketing mix that signifies that people are
appropriately related with the business both in terms of managing internal and external
environment. While considering the external and internal in relation to people`s context runs

the firm, and people at the same time buy the products. In the external environment, people
mainly refers to the customer. McDonald's wants to fulfil their clients to increase revenues in
the business. Whereas, internal people signifies the staffs. In McDonald's, all the workforces
are highly skilled and professional and treats its customer with great loyalty which increases
the brand image.
Diverse food and brand image attracts more people or even same people with an aim to taste
the new stuff or to get more footfall of people every day. McDonald's deliver an auto-
generated bill for their customers to deliver the expectation of the products, which they are
providing. Besides this, they also contact direct SMS to their patent clients who have
involved their mobile number to the firm for being rationalized with the modern news. People
can also ignore the food because the food or unlucky incidence in the store by presentation
the notice as a prove.
Last element of marketing mix that denotes to the procedure of how a customer can procure
the products. Apart from this, it provides free online home distribution system to the
customers. The customer can also order food online, and get access to free delivery system is
available in McDonald's. In reaction to the McDonalds actions, ASDA has very less stores
from where people access to several products. Online facilities are not also flexible like
McDonald's.
Developing and evaluating the marketing plan
SWOT Analysis
STRENGTH WEAKNESS
1. The company has been maintaining
world-wide brand equity
2. The company has a strong financial
1. Reducing market share
2. Taste and quality of the products
3. Slow product development

position
OPPORTUNITIES THREAT
1. The company should strength value
proposition and its offering so that it
could encourage customers.
2. The company has to focus on CSR,
reducing the impact of environment
and other community welfare.
1. Fluctuating foreign exchange rate
and changing demographic
conditions
2. Emergence of health conscious
customers.
PESTLE analysis
Political factors- This Factor plays a significant role in affecting the business operation. The
company operates in 100 countries and it is exposed to several political risks. McDonald`s
has to comply with several government regulations that further pertains to hygiene and health
(Clark, 2018). Fast food industry is pressurised by the government regulations due to
increasing fast food and other increasing factors such as obesity, junk food, high cholesterol,
and cardiovascular difficulties (Clark, 2018).
Economic and social factors- These factors can affect the sales of the organisation. People
who have been seeking to have more classy fare when they eat out in the restaurant. People in
western countries and US has been enjoying hamburgers and French fries (Bhasin, 2018).
Technological factors- Technology plays a restricted role in fast food restaurant industry.
Highly enabled technology assists the productivity by improving the effectiveness of the
management. Technological factors help the organisation with ordering, forecasting, sales,
foot traffic, and scheduling and easy food availability for food (Bhasin, 2018).

Legal factors- The Company must adhere to legal requirement such as labour, corporate law,
tax requirement and employment law (Clark, 2018).
Environmental factors- The Company has to comply with the EPA (environmental protection
Act). The company has to buy food from McDonalds where there was a great deal of waste of
packaging and finding their ways to landfill in their environment (Bhasin, 2018).
In order to create a considered marketing plan, the company has to revert to those market
opportunities that lie within the external environment-
Target market-
Identifying the niche market-, the company practices a mixture of demographic,
psychographic, and geographic breakdown in order to identify the taste and preferences of the
customers. In demand to cope up change in buying pattern of the customers & increase in
income level, Fast Food Company has started by spending distinguished targeting market
strategy to furnish to the customer growing wants. From the very beginning, the company has
evolved itself from various positioning, which is product-based in order to use the Value-
based positioning strategy. In order to accomplish the goals and approaching the target
market, it can be seen that a company has a set vision, which is beyond the things that we
sell. The company is using positive power for our customers, our individuals, our societies,
and our domain.”
Clear insight into why a potential customer would buy from McDonalds as McDonalds has a
huge brand name in terms of variety, ambience, and quality and takes part in CSR activities.
Apart from this, the company conducts a situational analysis to know the impact that is likely
the business or the advertisement can have which will directly affect the business
organisation and its profitability.

Identification of competitors that would also want your target customers includes Burger
King, Dominos, and other local fast food restaurants. Apart from this, the company enjoys
Extensive branding with the help of tie-up & sponsorships with most renowned entities such
as FIFA that has assisted the company to increase its reflectiveness in the Global market. The
target market of the company is regular buyers of McDonald’s are generally lies in age group
of 15-40 years who love to have hangouts with their family, friends, and loved ones. The
company have attracted and induced the younger inhabitants who are in schools or college.
Recently, the company has damaged its brand equity by lessening its brand equity and
disputes among the employees regarding their attitudes. This scandal has positioned the
company as a wrong doer in the eyes of the customers but slowly the company was able to
recover its position by improving the relations among the employees.
Further, it is important to decide the approach of marketing that defines what number of the
customer base has to be targeted to be increased with the help of budget so that each element
of the marketing process can be well known with their budgets in the spending of total fund
for promotional activities.
Promotional activities Estimated budget
Advertisement (ad production) $120
Public relations $50
Promotion through social media $150
Publication (newspaper and Magazine) $100
The segmentation of McDonalds will use demographic, psychographic and its considerable
variables that segment at the time of altering taste and likings. With the change in the
consumption, increase in income and buying behaviour of the customer helps to differentiate
targeting as well as catering needs. The company make its pricing strategy as per the

audience found such as promotional pricing, product line pricing, and penetrating pricing.
While targeting, the company already targets toys to the children through happy meals and
have fun accordingly. The effectiveness of this plan will be that large number of person
should be catered. The strength of this plan is that it first penetrated its coffee market so that
it can get greater market share. The company adhered the concept of value pricing that
includes various combination such as happy meals including fries, cokes, and toys. The
weaknesses would be that’s it may lack finance with lack of employees as because recently a
scandal happened.
The above estimated budget is based on previous year’s expenses on advertisement, public
relations, word of mouth, and promotion through social media so that the customers can
purchase the product.
Conclusion
This report had a strong discussion on marketing and its relationship between other
organisational functions. Moreover, the overall 7’ps is compared in the business organisation
to get achieve the business goals. Apart from this, a brief of the construction of marketing
plan has its evaluation has been undertaken in the report.

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