Market Position

The paper discusses McDonald’s current marketing position, its marketing position in the next five years, and the path to obtaining that position. It covers the fast-food industry, McDonald's success story, and the 4Ps of marketing. The article also suggests strategies for McDonald's to improve its market position in the next five years.

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Market Position
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Table of Contents
Introduction.................................................................................................................................................2
Current Status of Market Position...............................................................................................................3
Market Position in the Next 5 Years............................................................................................................6
The Road to Achieving the Position............................................................................................................8
Analysis.....................................................................................................................................................10
Conclusion and Discussions......................................................................................................................11
References.................................................................................................................................................12

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MARKET POSITION
Introduction
In business strategy as well as marketing, a market position is a term used to refer to the
perception that a consumer has towards a particular brand or a product in comparison to
competing brands. As such, market positioning entails establishing a brand or product’s identity
so that customers perceive it in a particular way. For instance, a car manufacturing company
might position its brand as a luxury while a battery manufacturer may position the batteries as
long-lasting. Besides, a fast-food firm such as McDonald’s might position itself as the provider
of quick and pocket-friendly standardized meals. Based on this definition of market positioning,
the paper will discuss McDonald’s current marketing position, its marketing position in the next
five years, and the path to obtaining that position, including a summary and discussion section.
In the fast-food industry, McDonald’s is the most successful chain. The corporation
became successful in this industry by responding quickly to competition, focusing on customer
service, as well as using marketing techniques in its early stages of development. The
organization provides services to more than 60 million consumers in over 120 states daily. Also,
the company operates more than 35,000 branches globally. The company’s strong foundation
dates back to 1940 when Ray Kroc. Dick and Mac McDonald opened the first chain in San
Bernardino. In 1948, as a result of declining sales, the restaurant was closed and later reopened
in 1955 to sell standard prepared French Fries, hamburgers, as well as milkshakes. Since then,
the company has continuously been increasing the number of product it offers on its menu. As a
result, the corporation has become the most successful fast-food chain globally. The
organization’s restaurants are operated either by a franchisee, affiliate, or the corporation itself.

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Current Status of Market Position
Intending to successfully sell to various market segments that comprise of the consumer
base, McDonald's must have a distinct and explicit place in the consumers’ minds. In the
consumer age where the customer has got increased choice and information, products must be
marketed to particular groups, having a clear identity that matches the benefits to the customer
(Al Badi, 2015). The company’s market position involves the selection of the best marketing that
best suits its target customer segment. Achieving positioning involves the use of marketing 4Ps
as well as the positioning matrix. In this case, McDonald’s became the world leader in the fast-
food industry by using an adoptive method of product positioning. Nonetheless, the firm engages
in periodical re-positioning of its products and services based on the changes of its customer
segment.
Since the corporation is a food service organization, its product mix mainly consists of
beverage and food products. A product mix’s element mostly covers a company’s outputs that
are geared towards satisfying consumer needs. McDonald’s product mix mainly consists of
salads, beverages, chicken and fish, sandwiches and hamburgers, snacks and sides, desserts and
shakes, McCafe, and breakfast (Harrington, Ottenbacher & Fauser, 2017). McDonald’s products
are the most fundamental in determining its corporate image and brand. The organization has
primarily gained a reputation due to its hamburgers. Due to the diversification of its product
lines, the firm has been able to satisfy the market demand, spread risk in its operations, and
increase revenue (Young & Page, 2014). Based on this element, it is evident that the organization
continuously innovates in designing new products aimed at attracting more clients along with
improving the stability of the business.

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The organization also positions itself in terms of price and it is commonly as a family-
friendly and low-cost restaurant in this industry. McDonald’s has got a low-cost strategy as well
as a narrow scope of its consumer base. The company uses prices in maximizing its sales volume
and profit margins. The two main pricing strategies used by the firm include bundle pricing
strategy and the psychological pricing strategy (Puzakova, Kwak & Bell, 2015). Concerning the
bundle pricing strategy, the company offers meals along with other product bundles at
discounted prices, compared to buying items separately. Nonetheless, in the psychological
pricing strategy, prices that appear to be more affordable are used. They include $--.99 rather
than rounding it off.
Place and distribution marketing enumerate the venues as well as the locations where the
company’s products are sold. The firm’s products are mostly distributed through restaurants.
However, the firm also uses other places as part of its 4P variable with the main places being
McDonald’s mobile apps, restaurants, kiosks, Postmate website and app among others. Most of
the company’s sales revenues are generated through McDonald’s restaurants (Nandini, 2014).
The kiosks re managed by some restaurants and they sell limited products that include sundae
and other desserts. The firm’s mobile app and other virtual places also make it easy for
consumers to access products and purchase them. Also, through the Postmate website and the
mobile app, clients can place their orders.
The final 4P variable used by McDonald’s is a promotion. The element elaborates on the
tactics that the company uses to communicate with its customers. For instance, the firm provides
new information that is meant to persuade clients to purchase a product. Some of the promotional
tactics that the company uses include advertising, public relations, direct marketing, along with
sales promotions. Among the organization’s promotion tactics, advertisements are the most

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notable (Mondurailingam, Jeyaseelan & Subramani, 2015). The corporation makes use of radio,
online media, TV, as well as print media to air their advertisements. Besides, sales promotions
are applied by the firm to draw more clients to the organization’s restaurants. For instance, the
company offers freebies as well as discount coupons for some of its products, including product
bundles, to attract more clients. Also, the public relations-based activities assist in promoting the
brand to the target market employing brand strengthening and goodwill (Yang, et al., 2017). An
example of such public relations activities include the Ronald McDonald House Charities as well
as the McDonald’s Global best of Green environmental program whose objective is to promote
the locals while at the same time boosting the corporate brand.
Market Position in the Next 5 Years
McDonald’s is a pioneer in the fast-food industry and it seems too comfortable with the
success that it has already achieved. Due to this, the corporation is constantly losing touch with
the franchise owners as well as with the customers. Despite that the company’s CEO Steve
Easterbrook turned the firm’s stock around, the CEO is yet to bring considerable technology in
the stalling giant (Toth, 2014). As a result, this has led to deficiencies in the company’s
operations which are noted both the franchise owners and the clients as areas that need
improvement. In the next 5 years, McDonald’s market can position can be as explained in the
following sections.
As noted earlier, the product is the main variable considered by the organization. For the
next five years, the corporation should embrace novelty items as well as junk food. Practically,
every day, it appears that fast-food chains are coming up with new monstrosity. It is true that
over the past years, the organization has had some novelty items on its menu such as the
Shamrock Shake. Since the firm already has a reputation for not serving very healthy food, it is

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high time that it owns this fact and instead go crazy with its menu (Heinberg, Ozkaya & Taube,
2017). It should consider incorporating products such as cheeseburger covered in pork belly or
even nacho cheese sauce, or even French fries filled with bacon bits, cheese, as well as chili.
Other products that it can include in its menu include a McFlurry that is drenched in caramel,
marshmallows, chocolate sauce, whipped cream. For instance, Dunkin’ Donuts and Dominos
have enormously increased their revenue due to their indulgent menu items. Without exception,
this could also work for McDonald’s as well.
Consumers are always concerned with prices associated with product and service
offering. The company’s raison d’être is serving cheap meals quickly, and the clients that are
more than willing to spend an extra dollar on one hamburger are instead more likely to go to a
fast-casual restaurant. With its wraps and the fancy Angus burgers, the organization is failing its
customers as well as the investors that frequently visit the establishment only to buy expensive
calories (Singh, Kalafatis & Ledden, 2014). In the next five years, McDonald’s is to adopt a
value pricing strategy. This type of strategy assumes that the consumers see price as a key
indicator of the value of a product. Value pricing would take place if the company increased the
benefits of its products while at the same time retaining or reducing the price. For instance, the
firm can use fries and “super-size” drinks. The fries or drink’s value is increased because the
client can obtain significantly more value from the product at a reduced price.
Nonetheless, in the next five years, the firm should adopt green advertising campaigns.
The company can adopt the strategy by the manner which they package their products, aimed at
presenting the brand as an institution that shares the society’s concern on regarding the
environment (Jankauskaite, 2016). This type of promotion strategy should focus mostly on the
buyers whose intention is to buy products that represent the value of environmental protection.

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Having such type of promotion strategy can ensure that such customers can buy fast food
without having to compromise their beliefs.
Regarding place and distribution, in the next five years, McDonald’s should make sure
that customers do have an easy time locating their restaurants or kiosks. As a result, the
corporation should consider opening several restaurants and kiosks in close proximity. Such a
strategy may be considered an over-saturation but the firm should consider it an important
marketing strategy (Priyono, 2017). Besides, to popularize the organization, McDonald’s, in the
next five years should consider adopting continuous trails of brand logos. Currently, the
company has done extensive branding with FIFA and the Olympics to enhance its global
presence. However, this is not enough because the firm competitors are adopting the same
strategy. Hence, in the next five years, the company should adopt extensive branding strategy.
The ease of access to the restaurant would promote the firm’s brand, along with underscoring
ease as well as convenience.
The Road to Achieving the Position
McDonald’s Corporation has been losing revenue in Asia and Europe among other areas.
The reason behind such loss seems to be associated with the company’s complicated menu. To
revamp sales in the next five years, the corporation should lay down a constructive roadmap that
will enable them to attain the new market position (Wang, 2016). The company’s mobile strategy
was rolled out mainly to market to the millennials, especially customers under 34 years. While
mobile may be considered an essential strategy for that demographic, the loyalty of the
customers mainly stems from a message that is emotional or creative. The organization has in the
past been losing customers to other firms such as Chipotle and Panera Bread. These
organizations claim to offer healthier products, including the use of daily fresh ingredients.

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Based on this, it is evident that consumers tend to engage themselves with a food brand that is
perceived to be healthier (Khandamova, Shchepakin & Bazhenov, 2017). The company offers
organic products in specific regions only such as in Germany. The company can improve its
product offering in the next five years by expanding its health-conscious food globally to entice
its clients.
It is worth noting that a mobile strategy that is well-defined and executed is good but it is
not key to improving McDonald’s business. The reason as to why consumers are preferring other
fast-food chains is as a result of menu options. Hence, over the next five years, the firm should
consider streamlining its menu options and connect emotionally with its customers. Also, to
achieve positioning in its products, it should focus on enhancing the quality of its main products
(Varadarajan, 2015). Years back, the organization was known globally for preparing the tastiest
hamburgers in America. However, today, the best hamburger is associated with other casual fast-
food restaurants such as Shake Shack Inc., as well as Five Guys. To improve its product offering
in the next five years, McDonald’s should identify more compelling menu items. The
organization should streamline its menu and engage in experimenting with new items to identify
products that are best-selling in the market and boost store traffic.
In the next five years, McDonald’s can achieve lower products in its product offering by
improving their relationship with its suppliers. For instance, taking Coca-Cola as an example, all
the McDonald’s outlets globally include coke products in their menu. As a result of loyalty as
well as a large amount of cash the Coca-Cola obtains from McDonald’s alone, makes it easy for
the corporation to discounted products (Chang & Jai, 2015). Hence, soon, the firm should aim at
building the same reputation with other suppliers, thus generating more products at a reduced
cost. However, the organization should primarily take into account the economies of scale. The

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firm should consider refining its supply chain to reduce the total cost. The price of a product is
dependent on the cost of producing it such as labor costs and the supply chain costs. Enhancing
supplier collaboration can be key to achieving low costs (Khan, 2014). Having an interactive
portal will promote efficient communication with its partners, thus enabling prompt decision
making on matters linked to resolving bottlenecks and diverting inventory. Applying this
strategy will be effective in lowering the supply chain costs as well as flatten the variables in the
company’s supply chain. Reduction in the supply chain costs would mean that the production
costs would also reduce. Hence, the company will be able to reduce its product price even
further.
Analysis
McDonald’s is struggling to keep up with other fast restaurants such as Chipotle in recent
times. However, due to its wealth and power, the corporation cannot yet be counted out of the
industry. Market Positioning is one among many ways that the organization can keep its brand
relevant. The concept of positioning outlines the measures that a business is supposed to take to
market its brand to the customers (Sinha & Sheth, 2018). The marketing department has the
mandate of creating an image for the good by considering the target audience. To achieve this,
the marketing department uses price, product, promotion, and place. The marketing strategy of
an organization is dependent on the intensity of its positioning strategy. An effective marketing
strategy promotes the marketing efforts and as such, it assists a buyer to move from knowledge
of a commodity to the actual purchase.
Some positioning to be considered include positioning in advertisements which is the first
place any business should position itself. Such positioning requires determining the target market
and the consumer needs that are being met. Besides, there is also positioning in terms of sales

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locations. To get to the customer not only involves advertising but also choosing the most
effective channels of distribution (Rodrigues, Nikhil & Jacob, 2016). The product and service
should be placed as close as possible to the target market, including creating similar
advertisements both in-store and out of the store to enhance the brand’s overall identity. Besides,
there is positioning in terms of price. An item’s price communicates to the buyer much about the
product. Most people associate high prices with high-quality products and lower prices with low-
quality products (Moravcikova & Kliestikova, 2017). Nonetheless, a product positioned as a
good substitute for the high-priced brand calls for pricing in the middle of the market. This is
aimed to avoid the product from being compared with the cheapest of the spectrum.
Conclusion and Discussions
McDonald’s has positioned itself in the market using place, promotion, product, and price
strategy. Through the cost leadership strategy, the company has attempted to position itself in the
customers’ minds as a firm that offers high-quality products at a pocket-friendly price compared
to other fast-food restaurants. Through bundle pricing strategy and the psychological pricing
strategy, the corporation can maximize its sales revenue and profits. The company is well known
for its hamburgers. Besides, its product mix also includes salads, beverages, chicken and fish,
sandwiches and hamburgers, snacks and sides, desserts and shakes, McCafe, and breakfast. Also,
the company’s products are mostly distributed through restaurants. Its promotion mix includes
advertising, public relations among others. Over the next five years, the organization should
consider reducing its prices further by streamlining its supply chain. Nonetheless, more
restaurants should be constructed at close proximity with each other. Nonetheless, the company
should conduct experiments to determine the most viable products in the market, aimed at
simplifying its menu.

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