Marketing & Management: Strategies for McDonald's

This report analyses the marketing process and strategies adopted by McDonald's, the world's largest restaurant chain. It evaluates the marketing mix and models used for conducting an effective marketing mix. The report also provides recommendations for McDonald's to improve its marketing opportunities.

Running head: MARKETING & MANAGEMENT
Marketing & Management
Name of Student
Name of University
Author Note

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Executive Summary
The report is based on the strategies that need to be applied while marketing and managing
products of an organisation. Marketing and management are two of the essential factors that
can help in the growth and development of an organisation as well as its products. The focus
of the report is on McDonald’s, a popular restaurant chain headquartered in California. The
report provides an overview of the marketing process and strategies that have been adopted
by McDonald’s. The marketing strategy of the restaurant depends on basic steps that help in
the analysis of the competitive market. McDonald’s puts emphasis on the marketing
segmentation and the elements of marketing mix so that it can reach the target customers and
focus on maintaining stability in the competitive market. Being a service industry, all the
seven elements of the marketing mix model of McDonald's have been analysed. The report
analyses the capabilities of the restaurant by conducting a SWOT analysis and identifying the
product life cycle of the restaurant. The product life cycle shows the reason for the decline of
the restaurant and its sales in the business market. Recommendations regarding product
training and development of employees and conducting a service differentiation is provided
for McDonald’s to remain competitive.

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Table of Contents
Introduction................................................................................................................................3
Application of theory to practise................................................................................................4
Marketing process and strategies............................................................................................4
Evaluation of marketing mix................................................................................................11
Role of marketing mix models.............................................................................................15
Conclusion and recommendation.............................................................................................23
Bibliography.............................................................................................................................25

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Introduction
Managing the marketing department is an important aspect of an organisation.
Without proper marketing skills, organisations cannot continue to function in an efficient
manner. According to Armstrong et al. (2015), marketing is essential so that a company can
reach out to its target market and continue to develop business strategies that can help in
gaining a competitive advantage. Marketing helps organisations to promote its products in the
market and ensure that they gain proper exposure. The analysis of the internal and external
factors can help in determining the longevity of a product or company in a business market.
The report analyses the manner in which McDonald’s continue its production in the
competitive business market. The theories related to the marketing principles are analysed
along with the process and strategies needed for conducting an evaluation of the market. The
marketing mix strategy of McDonald's has been evaluated along with the models used for
conducting an effective marketing mix. A SWOT analysis of the market has been analysed
along the product life cycle of the business. At the same time, recommendations have been
provided so that McDonald’s can improve its marketing opportunities and become the best
fast food restaurant in the region.
McDonald’s is one of the best fast food companies established in 1940. Richard and
Maurice McDonald’s founded the restaurant in California. In terms of revenue, McDonald’s
is the world’s largest restaurant chain and serves more than 69 million customers all over the
world on a daily basis. The franchise of McDonald’s has spread over 100 countries with a
number of outlets being up to 36,900 (Mcdonalds.com 2018). The most famous product of
McDonald’s is the hamburgers but in recent times, the company has managed to provide
other products such as chicken items, cheeseburgers, soft drinks and desserts. This is mainly
due to the response of the customers that stated that the restaurant provides monotonous and

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lack of choices in terms of products. Reports also claim that McDonald’s is the second largest
private employer in the world behind Walmart. The number of people in the different stores
of the restaurant is over 1.5 million (Mcdonalds.com 2018).
Application of theory to practice
Marketing process and strategies
According to Hatch and Howland (2015), marketing strategy is required to develop
any type of business. The lack of a proper marketing strategy can hamper the chances of a
business to attract clients. The objectives of a marketing plan are to ensure that the products
manufactured by a company fulfil the demands made by the customers. This can help in
maintaining a long relationship with the clients. Hence, to ensure that an effective marketing
strategy is made business need to maintain certain flexible techniques, which may be able to
provide a response to the concerns of the customers (Huang and Sarigöllü 2014). Thus, a
proper marketing strategy may help owners of business organisations to continue their
business in an efficient manner. Hence, a reputed company like McDonald’s need to follow a
systematic marketing process and strategy so that it can maintain its reputation in the
organisations.
In the case of McDonald's the restaurant had to undergo a huge struggle to reach the
current stage of the market that it enjoys now. During its initial years, doubts were cast over
the success of McDonald’s and the manners in which the business can grow develop.
However, with the application of proper business models the restaurant has managed to
continue its growth in the modern world. The introduction of the restaurant was in 1940 and
the first major achievement in the marketing segment that the restaurant received was in 1970
after it had opened Happy Meal (Mcdonalds.com 2018). This led the restaurant to search new
customers that can be attracted towards the products. According to Keegan and Green (2015),

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attracting and identifying customers is the first and foremost step that needs to be taken while
developing a marketing strategy. Thus, McDonald’s developed a target market that can
respond positively to the products sold by the restaurant.
One of the target markets of McDonald's were the young children. The introduction of the
Happy Meal was a big step in developing the attraction of the children towards the restaurant.
McDonald’s also incorporated toys for the children so that the sale of the products can be
enhanced. The children were the main influencers for the development of strategies for the
restaurant. The response of the children helped McDonald's develop and improve the Happy
Meal so that the concept attained longevity in the years to come. Currently, this marketing
strategy is used to attract children by aligning it with famous movie franchises. For example,
during the release of Star Wars: The Last Jedi, the restaurant started providing free toys of
actions figures and masks to attract the young people. As stated by Laszlo and
Zhexembayeva (2017) one of the reasons for the success of the company is the fact that it
provides emphasis on the satisfaction and retention of the customers.
Reports suggest that the investment of a proper marketing strategy of McDonald’s is
mainly done in the advertising and franchising model. McDonald’s has been adopting the
strategy since the 1960s during which the restaurant spent $2.3 million for its first national
advertising campaign. According to Pavlou and Stewart (2015), such an investment was
unheard of by any restaurant chain at the time. In the current period, the focus of marketing
strategy is more on the advertisement of the products. It has been seen that McDonald’s
believes in gaining the attraction of the people by using conventional advertisement methods.
During its inception in the early days, an advertisement has played a key role in the
promotion of McDonald’s and the products. As such, reports claim that McDonald's spend
about $2 billion in an advertisement of its product in order to attract its target market
(Mcdonalds.com 2018).

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It has been seen that McDonald’s focuses on three objectives that can help it to gain
customers by conducting good advertisement strategies. One such objective is to ensure that
people feel good about the products that it manufactures. According to Wagner III and
Hollenbeck (2014), the customers have linked McDonald’s to provide sub-standard quality of
food. Issues have been identified that have made people lose faith in the quality of food of the
restaurant. The issues consist of using un-fresh ingredients and monotonous nature of
products. This led to the loss of the restaurant and to mitigate this threat, the advertisement
campaign of McDonald’s is developed. The advertisement helps McDonald’s attain the
remaining two objectives of remembering the items and making the customers aware of the
items. At the same time, the franchising model of attracting customers is another important
marketing strategy that the restaurant uses. This model provides an estimation of the number
of restaurants that are owned by the restaurant (Caruana et al. 2015).
In order to understand the share it holds in the business, McDonald’s recently adopted
the franchising business strategy. Reports claim that McDonald’s only owns 15% of the total
number of restaurants. The remaining 85% has been owned by the franchises it conducts in
different business markets (Mcdonalds.com 2018). The restaurant chain follows the
framework in terms of training and monitoring of the employees that is conducted in the
franchises it works in. This helps the restaurant achieve good quality service, cleanliness and
value for the investments that it makes in the advertisements. The focus of this particular
marketing model is to ensure that the restaurant chain does not receive a negative response
due to the unhygienic environment. This particular strategy has helped McDonald’s to
increase its customer base and establish a reputation in the market (Eisingerich et al. 2016).
Hence, a marketing segmentation can be conducted.
Segmentation type Segmentation criteria Target segment of

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McDonald's
Geographic Region, density, age The target customers of
McDonald’s belong to both
domestic and international
market for its growth and
profitability. The people
residing in the urban and
rural areas can enjoy the
products as the positioning of
McDonald’s is situated for
the convenience of every
people. Moreover, the
restaurant also provides
home delivery facilities for
the convenience of the
people. As stated by Han and
Hyun (2015) the target
customers of the restaurant
range from 8 years of age to
45 years of age as it
manufactures products
enjoyable for all people.
Demographic Gender, lifecycle stage,
income, occupation
The demographic factors of
McDonald’s target both the
genders. This can open up

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opportunities for the
restaurant to enhance their
business and manufacture
products that can be
consumed by every member
of a community. The life
cycle stage is also targeted at
different people enjoying
different forms of life. As
stated by Hill and Alexander
(2017) since the restaurant
targets people of both the
rural and urban regions, the
low and middle-income
groups form the main
demographic targets of the
restaurant. Hence, the prices
of McDonald's are kept at a
low range for the benefit of
the customers. As such,
people belonging to different
occupations such as that of
students or underpaid
employees can also enjoy the
products that are served by

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the restaurant.
Behavioural Degree of loyalty, benefits,
personality, the status of the
users
The food served by
McDonald’s used to be
monotonous and thus, the
loyalty of the customers was
a doubtful factor for the
restaurant. Hence, the
restaurant targets the people
that are loyal to the restaurant
and does not switch readily
from one branch to another.
Kang, Alejandro and Groza
(2015) stated that the biggest
advantage of the restaurant is
that it can provide time
efficiency and cost benefit to
the customers. The type of
personality of the people that
are targeted by McDonald's
are usually the easy going
people that live life in a
careless manner. Regular fast
food consumers are the main
target for the restaurant after
segmenting them as pet their

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behaviour.
Psychographic Social class, lifestyle As observed in the
demographic segmentation,
McDonald's target customers
that belong to all classes in
the society. This includes the
lower class, middle class and
the higher classes. It is for
this reason that the restaurant
maintains a low price for the
product it sells to the
customers. The lifestyle of
the customers is analysed
based on the regions to which
they belong. For example,
people having a high income
belong to a different lifestyle
and McDonald's
manufactures products based
on such psychographic
attribute of the people.
Table 1: Marketing segmentation
(Source: Created by author)

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Evaluation of marketing mix
The marketing mix is the analysis of the elements that exist in a business market and
the manner in which organisations can use it to create effective marketing strategies. The
strategies that are applied to each of the element of the marketing mix are indicative of the
type of satisfaction customers receive while conducting a proper marketing scan (Kim, Vogt
and Knutson 2015). In this regard, the marketing mix elements of McDonald’s can be
evaluated.
Product: McDonald’s is one of the biggest leading fast food chains in the world and
provides varieties of products. In the earlier days, the products of McDonald’s were restricted
to only hamburgers that made it difficult to compete with other restaurant chains and similar
franchise based restaurants. The products of the restaurant have improved and now a variety
of products ranging from chicken to desserts is served by the restaurant. According to Pianroj
(2018), it is seen that the products vary according to the location of the franchise. For
example, McDonald’s in India serves burgers like the Aloo Tikka to appeal to the Indian
customers that do not consume meat. At the same time, in the Middle East where eating pork
is prohibited, the restaurant serves an alternative source of protein. Apart from the products
that are manufactured by the restaurant, Coca-Cola is the primary supplier of McDonald’s in
the department of soft drinks (Mcdonalds.com 2018). This provides opportunities for the
restaurant to maintain a collaborative strategy that appeals to the tastes and cultural strategies
of the people in a region.
Price: One of the strategies that McDonald’s undertake is the price bundling strategy.
According to Blut et al. (2015), such a pricing strategy has been implemented by the
restaurant since its inception in the 1940s. The introduction of Happy Meal gave rise to this
type of strategy that continues to provide effective revenue for the restaurant. The strategy
involves bundling products with meals and various other products to attract the customers. In

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order to ensure that the customers purchase more products, McDonald’s provides emphasis
on psychological pricing strategies. This type of strategy is affordable for the customers and
because of this person of all class can afford to purchase products of McDonald's. Due to its
competition in the market with KFC, Subway and Burger King, McDonald’s had reduced the
prices of the products by 25%. McDonald’s also offer discounts on the bundling of the
products as part of its pricing strategy. Bienstock, Mentzer and Kahn (2015) stated that
pricing strategy provides opportunities for the lower and middle-class customers to purchase
the products. The biggest reason for lowering of the price of the products is that the restaurant
targets teenagers and young people that are mostly students.
Promotion: As stated earlier about $2 million is spent by McDonald’s in its
advertising campaigns. The advertisements are provided in the form of billboards,
newspapers, social media and signage. As stated by Johnson (2016) McDonald’s targets
sporting events for the promotion of any new food that is introduced by the restaurant.
Promotion of McDonald’s is seen during the FIFA world cup in 1994 or the Super Bowl
Sundays so that customers can be made aware of the new products that are launched by the
restaurant in the market. It has been seen that McDonald’s prefer to use an aggressive
promotion strategy in its marketing mix. One of the strategic moves made by McDonald’s is
the fact that it never uses any negative publicity against its competitors. Apart from this, due
to its vast revenue, McDonald’s can afford famous celebrities to act as the spokesperson for
the restaurant chain (Kuratko, Hornsby and Covin 2014). Famous celebrities such as Michael
Jordan, Venus Williams, Justin Timberlake and Kobe Bryant are some of the prominent
names that provide McDonald’s with a proper promotional campaign.
Place: McDonald’s is located in over 110 countries and has over 36,000 stores.
Therefore, the location of each of the stores needs to be placed in areas that are easily
accessible by the people. According to Koh and Wong (2015), different forms of restaurants

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exist that provide an opportunity for the customers to get the taste of the store. For example,
the existence of Mc Drive, Mc Cafe, Mc Express and McDonald’s Next provide various
opportunities for the customers to gain the taste of the products served by the original store. It
has been seen that McDonald’s stores provide drive-through service so that customers can
enjoy the products both while sitting at the restaurant and while eating outside. The location
of Mc Drive is placed near the highways so that people approaching the restaurant by cars
can order food. These places do not provide opportunities to sit and eat. The place of the
restaurant dictates the revenue it earns per year. For example, the introduction of Mc Cafe in
Australia had raised the sales by 60%. At the same time, in order to remain updated with the
technical competence, McDonald’s Next has offered digital ordering and free mobile
charging in the places.
People: According to Hill and Brierley (2017), possess a unique manner by which
customer satisfaction is attained. McDonald’s focused on customer satisfaction and ensures
that the services provided by the company are unique and genuine. Every McDonald’s outlet
consists of a restaurant manager who undertakes the proceedings of the daily chores in the
restaurant. The goal of the restaurant is to ensure that the customer satisfaction is maintained
so that the revenue of the restaurant can increase. At the same time, McDonald’s also takes
good care of the employees. Despite being the second highest private employer in the
industry, the restaurant chain ensures that the employers working in the restaurant are
motivated so that they can provide good service to the customers. The mood of employees
reflects on the manner by which they behave with the customers (Kumar 2016). The
employees are given appraisal every year so that monetary motivation can be provided. They
are also given a high rating so that they remain encouraged to continue with their productivity
and give good performance for the betterment of the restaurant. At the same time, the
employees are involved in the decision-making activities as well.

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Physical evidence: One of the most important strategies of McDonald’s is the fact
that it leaves good impressions in the market with its physical evidence (Pye and Verba
2015). This creates a great impact on the customer’s mind and tempts them to visit the stores
rather than order online at home. Some of the attributes that McDonald’s have displayed as
the physical evidence include the hygiene, quality and the speed at which they deliver their
services. Most of the stores of McDonald’s attempts to create an atmosphere that family can
visit the store and enjoy a good and surplus meal. The restaurant also remains concerned
about the health and hygiene of the customers based on the food they consume and based on
the behaviour they conduct within the restaurant. For example, the decision to ban smoking in
the restaurant is a bold move that has helped in increasing the reputation of the restaurant. It
also plays light background music so that customers feel welcomed and enjoy their meals in a
homely atmosphere. Welch (2016) stated that the website of the company is also user-
friendly and provide proper guidance to the people that visit it for the first time.
Process: Reports has it that the process by which McDonald’s manufactures the food
has come under criticism most of the time. The quality of the ingredients and the food were
brought into the limelight after rumours were spread about the use of harmful chemicals for
the food (Mcdonalds.com 2018). However, with time McDonald’s have managed to improve
the cooking methods and have started using sophisticated equipment for the cooking of the
products. The packaging of food is also done in a new manner so that harmful substance is
not present during its delivery. It has been reported that the restaurant has invested in
improving the processes and have managed to update automation that is required for quality
packaging. The distribution of the restaurant has been streamlined so that the value and
culture of the restaurant are maintained. One of the greatest achievements of McDonald’s is
the fact that it has excellent processes because the restaurant has less turnaround time and
provides a fast home delivery service.

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Role of marketing mix models
SWOT analysis
Strength
 Well established
 Reputed name
 Standard quality of service
 Socially responsible
Weakness
 Sells junk food at a low price
 Face quality issues as it is a franchise
system
 Many complaints
 Expensive training of the employees
Opportunity
 Provide organic food for people
 Expansion of menu
 Increase revenue by sponsorship
 Use recycled material for
sustainability
Threat
 Sales depend on the economy
 Huge competition from emerging
markets
 Health consciousness of the people
 Competition from the local market
Table 2: SWOT analysis
(Source: Created by author)
The SWOT analysis shows that McDonald’s faces various threats and weaknesses
that may hinder the progress of the restaurant. The strength and opportunities provide a
platform by which these threats can be mitigated. According to Orel and Kara (2014), the
SWOT analysis provides an idea about the capabilities of a company and the strategies that
need to be taken to ensure that these capabilities are fully utilised. The proper utilisation of
the capabilities of an organisation can be utilised based on the assessment of the risks. After
the analysis, it has been seen that the strength of McDonald’s lie in the fact that it is a well-
established business.

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The fact that it has been in operation for over 78 years have made it a household name
and have contributed to the growth of the restaurant. Due to the experience of the company,
the number of investors is at a high. Pérez and Rodriguez del Bosque (2015) is of the opinion
that the investors are an important stakeholder of companies as their interest lies in the
improvement of the companies. In the case of McDonald’s the restaurant can gain a
competitive advantage after being assisted by the investors. The huge investment of
McDonald’s helps in lowering the prices and still manages to gain profit. Other strengths of
the restaurant are that it provides quality service and products. Although Shaw and Hamilton
(2016) may present evidence of the poor quality of ingredients used for manufacturing, the
fact that the restaurant serves high-quality food cannot be denied.
At the same time, due to its controversies, McDonald’s have managed to standardise
its products and undertake certain quality measures (Mcdonalds.com 2018). The food
products are made hygienic and high quality of products is served by maintaining the
standards. At the same time, McDonald’s provide social responsibilities that can help the
restaurant maintain good relations with the community people. McDonald's take an active
part in providing education to the people and making them aware of the social evils that may
befall in the community. Thus, the strengths of the restaurant can help McDonald’s continue
its competitive advantage in the market.
The analysis also shows the weakness of the restaurant that may hinder its progress
and consequently may be the reason for its downfall. One of the biggest problems faced by
the restaurant is the fact that it provides junk food. According to Watson et al. (2015),
rumours have been spread against the restaurant that it serves junk food at a low cost. This
provides problems for the restaurant as people like to spend on quality food instead of junk
food. Although the price is low, the junk food of the restaurant is not well received by most
people around the world. Apart from this, other weakness of the restaurant includes facing

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quality issues. The stores of McDonald's are spread over 100 countries with more than 36,000
franchises. This makes it difficult for the managers to continue to provide good quality food
on a consistent basis.
It is not always possible for the managers to analyse the quality of food in every
restaurant and thus, the quality fluctuates from one location to another. This proves as a
major weakness as people suffer from health issues across locations due to a variable in the
quality. The fact that the restaurant targets kids make this particular weakness as a major
concern for the restaurant. Zablah et al. (2016) are of the opinion that complaints regarding
the use of inorganic materials hamper the reputation of the restaurant. In the countries
situated in the Middle East, the restaurant faces criticism due to the application of inorganic
materials for the manufacturing of products. This leads to the hamper of quality and
significantly led to negative responses from the customers. Thus, the lack of quality of food
and the use of inorganic materials provide the restaurant with a disadvantage in the market.
Zhang, van Doorn and Leeflang (2014) stated that the restaurant has a huge employee
turnover rate and spend a lot of cost on training the employees. The training is required so
that the efficiency of service is maintained. The excess financial requirement of the training
programmes makes it difficult for the restaurant to spend finances on other important matters
such as the introduction of different food items and maintaining the quality of the physical
stores.
Despite the weakness, McDonald’s can convert the strengths into opportunities. As
observed by Anton (2015) the uniqueness of the SWOT analysis is that it provides companies
with an opportunity to expand in the business market. The opportunities present in the
business market of McDonald’s can be attributed to the fact that despite its criticisms of
producing inorganic food, the restaurant can utilise its strength to provide organic food to the

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customers. This is one of the opportunities that are received by the restaurant as the
ingredients are sometimes manufactured by the restaurant. This normally proves as an
advantage for the people that are health conscious as the organic food can help the restaurant
gain the necessary advantage to expand in the market.
Reports suggest that one of the major expansions of McDonald’s have been the
variety of products that it has developed (Mcdonalds.com 2018). Unlike in its initial days,
McDonald's have expanded the menu from just burgers and have included chicken, desserts
and soft drinks. This can prove as an excellent opportunity for expansion of the restaurant as
competition can be provided to other restaurants that provide similar food requirements. At
the same time, McDonald’s is involved with various sponsorships. Dockalikova and
Klozikova (2014) stated that sponsorship could help McDonald’s to continue its corporate
social activities. It has been seen that one of the strengths of the restaurant is its responsibility
towards the members of the society. The society can be improved by providing education and
proper care services that initiates its developments.
McDonald’s can sponsor some of the events that the society undertakes for its
improvement and increase its fan base. This is effective in collaborating with the society and
understanding the requirements of the people. Dobbs (2014) is of the opinion that the
sustainability of the environment is one of the major factors that need to be prioritised by
most companies. In the case of McDonald's the restaurant provides a takeaway option for the
people and it can help if recyclable materials are used for this purpose. Thus, the restaurant
can maintain a proper corporate social responsibility by adopting this particular method of
sustainability of the environment.
The threats to the restaurant are that the sales are dependent on the economy of a
country. According to Lamas Leite et al. (2017), the economies of the countries are unstable

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and it can be a huge threat to the restaurant, as the prices cannot be fixed. The restaurant
needs to be specific about the prices of the products as based on it the target market can be
acquired. With continuous fluctuations in the economy, this cannot be made possible as the
income of the people to decrease. Therefore, in economically unstable countries, McDonald’s
cannot attain success and the local restaurants may have a competitive edge over
McDonald’s. This paves way for the emergence of competition. The threat can be received
from the existing local restaurants as well as the reputed restaurants that provide similar food
items at McDonald's.
The threat can be mainly dependent on the type and quality of food, served by
McDonald’s and the economic fluctuations that take place. Porter and Heppelmann (2014)
opined that these are considered as threats to the restaurant as it may hamper its growth and a
possibility of further expansion. The restaurants that provide organic food and the emerging
business that meets the requirements of the customers in terms of quality can prevent
McDonald’s from expanding further in a country or in other parts of the world. Another
important threat that the restaurant needs to fend off is the health consciousness of the people.
This is particularly an important threat in countries like Australia or the UK in which the
people believe in the consumption of healthy food to stay fit.
The fact that rumours have spread about the junk food that is prepared by the
restaurant, makes it difficult for it to continue its work in the business market (Rothaermel
2015). This again poses competition from the local market, as the local restaurants remain
aware of the type of food that the people prefer. The cultural value of the locality is also
upheld by the local markets in trying to outwit the competitiveness of McDonald’s.
Product life cycle model

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According to Theaker (2017), product lifecycle is considered as an important concept
in marketing. It helps in discussing the stages that a particular product goes through from its
initial stage until its establishment in the market. However, it needs to be kept in mind that all
the products do not reach the final stage of the product lifecycle as it fades away in the
middle stages. In this regard, the product life cycle of McDonald's can be analysed to
understand the rate at which the restaurant has grown in the market and the current stage of
its popularity. The four stages of the product lifecycle are analysed separately.
Introduction: At the introduction stage, McDonald’s have implemented frequent
changes. The inception of the restaurant has been in the 1940s and since then with the growth
of the population and the expansion of the business, McDonald’s have undergone several
transformational changes. Zhao (2016) stated that these changes are attributed to the
marketing mix elements, as based on the changes, the restaurant has managed to develop its
existing brand image in the market. For example, the introduction of the Happy Meal is one
change that has helped the restaurant attain a competitive edge over the rivals. The target of
the children has helped in broadening the scope of the restaurant.
The decision to create a simple menu consisting of burgers, cheese fries and soft
drinks have helped the restaurant to attract customers of all types as the food served is not as
heavy as that in other restaurants. The price of the products has also changed significantly
with the change in demography. For example, in the initial days, the price of a burger in
McDonald’s was 15 cents, but during 1990, the price increased to 75 cents (Mcdonalds.com
2018). This signifies the change in focus of the restaurant as it shifted its focus to profit-
making and becoming the best restaurant in the areas served.
Growth: The growth stage is the most important stage in the perspective of every
company. Similarly, in the case of McDonald's this stage is crucial as can help the restaurant

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to achieve organisational growth and expansion. As stated by Antonakis and Day (2017) the
major changes that take place in an organisation usually occur at this stage. Innovation and
other major changes in McDonald’s occur at this stage. The reputation of the restaurant along
with its criticisms is mostly due to the changes and decisions that have been taken at this
stage.
In this regard, some of the changes that McDonald’s have undertaken include the
changing of the name in the initial years along with the introduction of the clown Ronald
McDonald (Mcdonalds.com 2018). This particular strategy is helpful for attracting children,
as the application of the clown is a wonderful strategy that is obtained by the restaurant.
Apart from this the introduction of Egg McMuffin in 1972, was another strategic change that
the restaurant had undertaken. This is mainly to serve quick breakfast to the people. After
five years of the success of the strategy, the restaurant added a full breakfast menu to attract
the customers. Apart from these promotional methods of the restaurant was changed with the
introduction of slogans that attracted the customers.
For example, the slogan “You deserve a break” helped McDonald’s reach the
customers of all 50 states in the United States. The introduction of toys with every happy
meal helped in the further growth of the restaurant (Healy 2016). Promotion of the products
such as Fry Kids Meal and Happy Meal helped McDonald’s to continuously innovate itself in
the market and grow in the domestic and international market. Thus, these strategies have
helped McDonald’s to attain the growth stage and implement changes that can help the
restaurant to attain maturity in the market.
Maturity: During the maturity stage, most organisations look at opportunities to
improve the products and make it more appealing to the customers (Meenaghan 2017). This
signifies the level at which an organisation have evolved in the market. The changes made in

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the products can help the organisations to increase its market share and remain competitive in
the business. In the case of McDonald’s the focus of the maturity stage mainly depends upon
the ways by which the products have evolved. Reports suggest that McDonald’s have
achieved significant maturity since its inception in 1940.
The number of items in the menu increased along with its varieties (Mcdonalds.com
2018). The evolution can be seen from the diversity of the menu that the restaurant provides
to the customers. The introduction of chicken nuggets, ice cream and soft drinks has helped
the restaurant be more competitive and gain increased revenue from the market. McDonald’s
have managed to prove that the restaurant can satisfy the customers with the introduction of
new products just like the success it had from that of old products. Another important
maturity that has seen in the restaurant is the fact that the outlet of the restaurant has
improved. During its initial days, McDonald's only had a few stores that provided
opportunities for sitting and dining. Other methods of ordering food or consuming food were
not available. This evolved with time as the restaurant managed to introduce online ordering
service and take-away for the customers (Morschett, Schramm-Klein and Zentes 2015).
The establishment of McDrive has helped the restaurant to open up stores in the high
ways that can assist people with cars to stop by the restaurant. This can be considered as
innovative as well as the strategic approach of the restaurants in attracting customers from all
over the place. Thus, the restaurant has matured mainly due to the growth that it had endorsed
particularly in the past 25 years. The competitive attitude of the restaurant along with the
strategic analysis of the market and the customers has helped in attaining the status for the
restaurant.
Decline: Despite its success in most parts of the world, McDonald’s have seen a
considerable decline in its popularity. Reports show that the factor that caused the decline of

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MARKETING & MANAGEMENT
McDonald’s and its popularity in the market is due to the release of the documentary movie
Super Size Me (Mcdonalds.com 2018). The director of the movie, Morgan Spurlock had
directed the movie based on the food served by McDonald’s. However, the restaurant
claimed that the scenes displayed in the movie are false and that the products served by
McDonald’s attain the health of the customers. Apart from this, a couple of girls from New
York tried to sue the restaurant because of their health condition. This led to the decline of
the restaurant as the people became more conscious about the type of food that is served by
McDonald’s. According to Narver and Slater (2014), this particular factor led to the threat
from the competitors. However, after the release of the documentary McDonald’s tried to re-
launch the products by adding more organic and healthy staffs in their menu such as
milkshakes and grilled burgers.
1940 1958 1976 1994 2012 2018
0
0.5
1
1.5
2
2.5
0.8
1.23
1.6
2.2
2
1.75
Series1
Figure: Decline in sales of McDonald’s
(Source: Papadopoulos and Heslop 2014)

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MARKETING & MANAGEMENT
Conclusion and recommendation
After the analysis of the capabilities of the restaurant, it can be said that McDonald’s
need to maintain certain changes, that can help it to remain afloat in the competitive business.
One such recommendation that can be provided for the restaurant is based on the service
differentiation. The restaurant needs to focus on the service differentiation so that the target
market can perceive McDonald's as a service restaurant. Superior services can be offered by
the restaurant at each stage so that delivery of products can be done in a convenient manner.
The availability of well-trained employees can help in achieving this target. It has been seen
that the restaurant spends finances in training the employees. Thus, McDonald’s need to
continue this investment so that the training and development of the employees are not
compromised. Thus, it can be said that with the recommended changes McDonald’s can
maintain their status in the business market and provide responses to the doubtful questions
about the validity of the products.

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MARKETING & MANAGEMENT
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