Marketing Management : McDonalds

RUNNING HEAD: MCDONALD’S
MARKETING
MARKETING MANAGEMENT

MCDONALD’S 1
Executive summary
McDonald’s is a renowned company engaged in fast food production in international market.
Its high presence, reputation, multiple product line, and outlets in prime locations offer
strength to the company. Customer’s low brand loyalty and price sensitivity acts as weakness.
Additionally, raising population strength acts an opportunity and presence of competitors and
government regulation develops threats for the company. It is highly affected by the market
trends of healthy eating, Chatbots, and artificial intelligence. Its main stakeholders are
customers, suppliers, shareholders and employees. Its rivals include KFC, Burger King and
Dunkin Donuts.
The demographic segmentation is the suitable measure to divide the market. To excel in
target market, social media marketing, storytelling and customized service is recommend.

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Contents
Introduction................................................................................................................................3
Market Analysis.........................................................................................................................3
SWOT.....................................................................................................................................3
Trends.....................................................................................................................................5
Relevant stakeholders.............................................................................................................5
Competitors............................................................................................................................7
Market segmentation..................................................................................................................7
Target market recommendation.................................................................................................8
Conclusion..................................................................................................................................9
Bibliography.............................................................................................................................10
Appendix..................................................................................................................................12

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Introduction
The report reflects on the concept of ‘Marketing Management’. It is the application to track
and review the marketing resources and activities. The key objective of marketing
management is to raise organizational profitability by maximising consumer satisfaction. It
allows the organization to understand customer needs, improve the product/service and reach
the customers (Keegan, 2017). It focuses on a product (Fries) of a renowned business
enterprise named ‘McDonald’s’. It is an American fast food chain founded in the year 1955.
It has a high presence in the global world as it serves its customers in 119 countries
(Foxnews, 2013). In Australia, it has about 955 restaurants (Heffernan, 2016). It offers wide
number of products in multiple varieties like Snack wrap, Chicken McBites, McNuggets,
sandwiches, desserts, and beverages. It is highly recognized for its delicious French fries.
Globally, it sells 9 million pounds of fries to its customers (Smith, 2019).
Considering the report structure, the initial section includes the market analysis of the
company and it involves the application of ‘SWOT’ framework. It includes situation analysis,
market trends, relevant stakeholders, and key competitors existing in the market. The next
section includes the market segmentation based on distinct characteristics. The succeeding
part involves the practical and economical suggestions for the target market.
Market Analysis
Market analysis allows the organization to gain essential information about the market laying
an impact on the organization. It helps in minimizing the threats and availing the best usage
of opportunities. It aims to formulate strategies for effective running of the business (Terpstra
et al., 2012).
SWOT
Strengths
1. Global presence: McDonald’s is a globally recognized multinational company as it
has its outlets in multiple countries. As mentioned previously, it has its presence in
119 countries (Foxnews, 2013). Therefore, higher presence allows the organization to
reach wider audience. It gave rise to strength of having an access to large customer
base. It reduces the risk of business failure as loss in one country will be optimized
through profit from another country.

MCDONALD’S 4
2. Goodwill/Reputation: McDonald’s is serving its customers from 1955 (Biography,
2020). Therefore, it has high goodwill and reputation in the market. It acts as strength
as it assists the company to easily attract new customers, and minimize competition
from new fast food companies.
3. Multichannel presence: The company offers products via online and offline channel.
It allows the customer to order product via mobile application, and online website.
Therefore, high and easy access enables in maintaining customer interest.
4. Prime location: It has its outlets mainly in prime location of the country. It acts as
strength as it helps in attracting customers in bulk, offering easy and convenient
reach.
5. Multiple product line: McDonalds offer multiple products like Burger, fries and
beverages and deserts (Mcdonalds, 2020). Therefore, it has helped the company to
fulfill the diverse food cravings of the customers. Additionally, it will help the
company to raise its sales revenue.
Weaknesses
1. Price sensitive customers: Australians are price sensitive in their purchasing decision.
(Brien, 2018) Therefore, it restricts the company to raise the price of its product (fries)
2. Low brand loyalty: Australians show low brand loyalty and therefore McDonalds
often experiences fluctuation in number of loyal customers (Brien, 2018).
Opportunities
1. Rising population: With the passing years, there is growth in population in Australia
(Heritage, 2020). It is a chance as rising population will gave rise to more potential
customers and revenue.
Threats
2. Presence of competitors: The Company faces competition from KFC, Burger King,
Starbucks and Dunkin Donuts (Owler, 2020). It emerges a threat of loss in number of
customers as they are offering like products as attractive prices.
3. Government regulation: The legal bodies are taking high control over the fast food
companies and it develops a difficulty of aligning with these laws. It acts as a threat as
failure in complying with these will leads to heavy penalties.

MCDONALD’S 5
Trends
In the year 2019, ‘Healthy eating’ has become a global trend among the customers (Wells,
2019). Therefore, a high number of customers are showing their preference towards healthy
bites and minimizing their consumption of fast food. This trend is laying a direct impact on
the McDonalds overall sale as it is experiencing a decline in its annual revenue growth.
The Chatbots has become a trend for solving customer queries and assisting them (Patel,
2018). This trend is offering benefit to the company because gradually it minimizes
company’s dependence on human resource. Additionally, it also reduces the cost involved in
employing human resources.
Increased artificial intelligence is also a trend in the current and succeeding years (Patel,
2018). It is assisting the company and minimizing the physical efforts. It is helping the
company to connect better with its customers and maintain their interest in McDonald’s
product.
Rise in social media platform is counted as a significant trend in the year 2020 (Hootsuite,
2020). It will benefit the company to attract more customers by availing the usage of social
media platform. Thus, it will save the marketing efforts of the company and it will enable the
company to devote its attention on other business operations.
Relevant stakeholders
The stakeholders are the individuals that attain an interest and influenced by the business
operations. The stakeholder’s interest and influence differ in the organization. The
organization has specific obligations towards the stakeholders and it develops their
responsibility to fulfill them to develop better interpersonal relation (Andriof & Waddock,
2017).
Stakeholder matrix
S/N Stakeholder Interest Description
1 Owner Profit growth An owner is the individual invested a capital in
the business. The McDonalds was founded by
an American entrepreneur named Ray Kroc
(Biography, 2020).
2 Employees Job security, job
satisfaction and
The employees form the part of internal
stakeholders. McDonald’s has employee

MCDONALD’S 6
motivation strength of around 375000 (Cain, 2018). It
offers high number of benefits like paid leaves,
maternal leaves, fine pay, managerial support
and other non-monetary benefits. It lays prior
consideration towards its human resource and it
has allowed the organization to gain positive
reviews and a fine rating of 3.5 stars (Indeed,
2020).
3 Customers Value for money,
product
availability
The customers are included in external
stakeholders and aims to achieve the best
quality products at reasonable price. The
McDonalds serves high number of customers in
Australia as well as in international market.
Globally, it serves about 69 million customers
daily (Smith, 2019).
4 Suppliers Prompt payment
and long term
contract
Suppliers are the individuals that offer raw
material and other essentials to the organization
to fulfill customer’s demand. The company
avail its raw material from multiple suppliers.
These include Tyson Foods, Hildebrandt Farms,
100 Circle Farms and many more. These
company supply fish, bakery, meat and other
dairy products (Khandelwal, 2019).
5 Shareholders Share price
growth
Shareholders are the investors holding a share in
the business. These offer financial support to
the company and also aid in decision making
process. They hold a share in the profit and are
often referred as well well-wishers of the
organization.
Competitors
McDonald’s faces intense competition from companies engaged in similar product line. Its
key competitors are KFC, Burger King, Subway, Starbucks and Dunkin brand (Owler, 2020).

MCDONALD’S 7
All these fast food brands offer similar products to the customers but at distinct price, and
quality. There are multiple factors responsible for facing intense competition from the rivals.
Firstly, all these companies develop the high use of marketing to attract the customers. They
rely on social media marketing, sales promotion techniques to grab customer’s attention.
Additionally, they are offering products since large number of years and therefore they do not
face difficulty in gaining new customer’s trust.
Market segmentation
Market segmentation refers to dividing the market into smaller groups based on distinct
characteristics. The market is segmented on the basis of demographic, geographic,
psychographic and behavioural attributes (Wedel & Kamakura, 2012).
1. Demographic: This attributes divides the market based on factors such as age, gender,
occupation, income, and education level (Wedel & Kamakura, 2012). McDonalds
focuses on both genders of age group of 8-45. Its sells its fries at low prices and
considers customers of low and middle income group. Its fries emphasizes on students
as well as employees.
2. Geographic: It splits the audience in terms of customer’s country and region (Wedel
& Kamakura, 2012). It focuses on customers (residing in rural and urban areas) of
domestic (United States) and international market.
3. Psychographic: It separates the market on the basis of interest, value, lifestyle and
attitude of the customers. It takes into account the psychological aspect of the
customer behaviour (Wedel & Kamakura, 2012). It considers elements affecting the
purchasing decision of the customers. It emphasizes on customers showing preference
for fast food and adopting careless and unhealthy lifestyle.
4. Behavioural: It divides the market by behaviour and decision making patterns of the
customers including consumption and usage (Wedel & Kamakura, 2012). Considering
this segmentation, it focuses on hard core loyal customers focusing on achieving
products at low prices.
Demographic segmentation is the appropriate method among all the four market
segmentation variables. This is because age, gender, and income are some of the relevant
elements to divide the market. This can be understood from the example described below:

MCDONALD’S 8
Example: Company A sells engaged in manufacturing of automobiles and offers the same at
premium price. In this case, age and income are the two essential factors to divide the market.
This is most often age determines that weather the product is suitable for the customer or not.
Additionally, income and occupation depicts that if the customer attains suitable resources to
purchase the product or service.
Target market recommendation
McDonald’s targets customers (male and female) of low and middle income group engaged
in studying, employment and business activities. It focuses on individuals that do not lay high
focus on adopting healthy lifestyle (or eating habits) but rather show high interest for fast
food. It emphasizes on consumer showing high brand loyalty and residing in urban and rural
areas of Australia. Following are the suggestions for McDonald’s to excel in its target market.
1. McDonald’s should develop the high use of social media marketing as it mainly target
youth and lower middle age group. This is because they are highly active on these
sites as well as the number of social media users are also increasing with the passing
years. It should mainly opt for Facebook for product promotion of ‘Fries’. It will
enable the company to gain attention of high number of customers as Facebook is the
top used social media website in Australia.
2. For social media marketing, it should avail the use of ‘story telling’ marketing. This is
because they are high active on social media (like Instagram and Facebook). It will
provide dual benefit to the company. Firstly, it will help in cutting cost engaged in
marketing as it is an economical way to grab customer’s attention towards the brand.
Secondly, it will assist in making customers feel valued, and developing interest
among the new customers (Tuten & Solomon, 2017).
3. The company should offer customized service as well via its digital platform. It
should offer variety of fries to its customers as young customers prefer to experiment
with their taste. Additionally, it will help the company in raising the customer’s
satisfaction rate.
4. It should offer discounts and coupon codes to its regular and loyal customers. It will
allow to company to maintain their (loyal customers) interest in the product
(Chaharsoughi & Yasory, 2012).

MCDONALD’S 9
Conclusion
The report summarizes on the marketing management of McDonalds. From the above
discussion, it is recognized that it is a highly recognized company with strong presence in the
market. It is evaluated that fries is one of the top sold product of the company. Considering
market analysis, McDonald’s has high number of strengths and opportunities contrasting
weakness and threats. The market trend relating Chatbots, social media platforms, and
healthy eating is laying a direct impact on the company. Its key stakeholders are customers,
employees, shareholders and suppliers attaining a different interest in the business.
Additionally, demographic is the suitable attribute to segment the market. Concerning target
market, it is recommended that it should opt for social media marketing, storytelling and
customized service.

MCDONALD’S 10
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[Accessed 23 January 2020].
Cain, A., 2018. 11 insider facts about McDonald's employees know and most customers
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Keegan, W.J., 2017. Global marketing management. Pearson India.

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Khandelwal, R., 2019. McDonald’s Supply Chain: A Must-Know for Investors. [Online]
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MCDONALD’S 12
Appendix
Figure 1: McDonald’s competitors
Source: (Owler, 2020)
Figure 2: McDonald’s supplier’s name
Source: (Marketscreener, 2020)