McDonald Hotels and Resorts: A Case Study in Hospitality Management

This case study discusses McDonald Hotels and Resorts as a company in the hospitality management industry. It covers the company's history, product mix, marketing strategies, and key performance indicators.

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Primarily, this hospitality management activity will Discuss McDonald Hotels and
Resorts as the identified company towards the achievement of the study objectives. To start with,
McDonald Hotels and Resorts is a Scotland-based hotel resort with branches in England and
Spain. The hotel company is renowned for its dishes such as fries, chicken, fast food, and
hamburgers among others. McDonald’s headquarters are in West Lothian, Scotland. However,
some of its branches are in Spain and England. The company began in 2003 under the flagship of
its buyers that got it from the predecessor shareholders. The management met the buyout clause
and the purchase facilitated by the Scotland Bank. At that time, the transaction was valued at
about £6000 million. Later, the company rapidly expanded after purchasing "Forte Heritage
Hotels" from the renowned Forte Hotels Company. Later, the company claimed Granada plc
after which it sold about 25 hotels to one “Moorfield Real Estate Fund”. Afterwards, McDonald
Hotels and Resorts firm bid for Management Contract to be given the mandate to run the sold
restaurants and hotels but was defeated by AccorHotels.
To ensure increased success and effective operations in line with hoteling, McDonald
applies a simple efficient format. The format is effective enough to produce huge food quantities
at subsidized prices. For instance, hamburger is sold at only 8 bucks, that is half the price that
competitive restaurants sold the same product at. In addition, the hotel offers self-service
operations that eliminated the need for attendants. Therefore, customers get their foods quickly
since food is also prepared ahead of time, packaged, and warmed (Kroeber, Et al., 2015).
On product mix, since McDonald’s is a food store, its product mix is mainly heavy meals and
food products. The product mix of a company also determines its marketing mix that covers a

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number of corporations outputs provided to the targeted markets. The product lines of
McDonald’s therefore, are sandwiches and hamburgers; fish and chicken; salads; sides and
snacks; beverages; shakes and desserts; breakfast (All-day); and McCafé (Louis, 2017).
Concerning marketing’s 4Ps, the most important element is products. The product determines the
corporate image and the brand of the food store. For instance, the store is renowned for its
traditional burgers. Apart from that, customers also have access to other products like desserts,
chicken and fish, as well as breakfast meals (McKenna, 2012). The intensive and generic growth
strategies of McDonald’s largely influence its line of production. Therefore, the company
diversified its production to ensure that marketing demands are met while improving its
revenues. The mix deduces that the store has been keen on introducing new innovative products
while attracting more buyers and improving the stability of business organizations (Schein,
2004).
On the distribution of products, McDonald’s mainly sells its products to restaurants. Therefore,
the places that McDonald’s distributes its products to include kiosks, restaurants, mobile apps,
and postmates website among others. However, the restaurants of McDonald’s generate most of
the store’s sales revenue. On the contrary, as highlighted above, the company also uses mobile
apps to distribute its products. The apps provide virtual venues where the store can sell,
customers accessing the information regarding such products, then buying them. On product
promotion, McDonald’s focuses on effective communication with targeted customers (Mello,
2015). It, therefore, means that the food store would provide new information time after time, to
coax customers to purchase their products. Some of the ways that McDonald’s use to influence
purchase include sales promotion, advertising, direct marketing, and public relations among
others (Louis, 2017). On pricing and pricing strategies, the strategies of pricing employed by

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McDonald’s are aimed at maximizing profits as well as the volume of sales. These strategies are
bundle pricing and psychological pricing. With the strategy of bundle pricing, the store offers
food products and others at discounted prices once they are purchased in bundles unlike when
they are purchased separately. For instance, when buyers buy an “Extra Value” or “Happy
Mealtime” they would do so under product value purchase plan or go for an optimized cost plan
that is subsidized. Otherwise, under the psychological pricing strategy, McDonald’s uses a
significantly more affordable technique when pricing like $xx.95 and not a rounded of the price.
This strategy has helped the organization a lot in encouraging clients to buy their products
(Knapp, 2016).
On target market analysis, the main marketing idea that McDonald's employ is ensuring that the
products offered, under the environment offered, is friendly, fun, and enjoyed by all. The food
store, therefore, mainly seeks to appeal a large customer base from those who love “Happy
Meal” to them with fast lives that intend only to grab breakfast on-the-go while enjoying free
WiFi. The taste of food particularly the chip and burger have to be top quality since most
customers prefer them. The store also prefers hygiene before everything (Hofstede, 2013).
Otherwise, families without children, those with children between 3 and 10, working class,
soccer coaches, and many other classes of individual prefer eating at McDonald’s stores. In the
morning, those that will visit the stores are individuals who intend to grab a bite on the move,
those who would sit and eat breakfast, those who would pick coffee and sit while enjoying Wi-Fi
and them that would order for heavy food before their long commute (Hofstede, 2013).
Therefore, the store intends to use its marketing strategies to capture every segment of the market
since it does not select any type of audience. Such is the reason why the food store will offer
meals for kids, a place to sit and relax plus Wi-Fi for those who wish to sit and have their meals

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at their own pace, breakfast that is served quick for them that are busy and rush in the mornings,
to those that are on transit. Therefore, McDonald’s has gained a lot of respect in the market
(Hisrich & Ramadani, 2017, pg. 76).
This paper also mentioned before that McDonald’s uses succinate-pricing techniques to boost its
purchase base. Such techniques are aimed at maximizing profits as well as the volume of sales,
as mentioned before (Caterer, 2018). Otherwise, the particular strategies are bundle pricing and
psychological pricing. For bundle pricing, it was mentioned that the store offers food products
and others at discounted prices once they are purchased in bundles unlike when they are
purchased separately. On the contrary, psychological pricing strategy entails the application of
significantly more affordable technique when pricing like $xx.95 and not a rounded of the price.
This strategy has helped the organization a lot in encouraging clients to buy their products (Goi,
2009, pg. 3).
There are two key performance indicators for McDonald’s. One is recycling and repackaging
while the other is investing in individuals. On “Recycling and Packaging”; since McDonald’s
is one of the largest food store companies in the world, it has a pledge to reduce general
packaging and adopt sustainable and innovative packaging (Aho, 2013, pg. 33). Apart from that,
the company will engage people, customers, and communities adopting sustainable recycling
behaviours. Come the year 2025, the company intends to 100% employ sustainable packaging
techniques. However, the corporation’s interim target is to achieve 100% fiber packaging by
2020. By so doing, the restaurant shall have eliminated foam from its global packaging System
towards the end of 2018 (Dominici, 2018, pg. 18).
On recycling, the restaurant intends to achieve 100% recycle3 guest packaging by 2025.
However, the restaurant is pretty aware that the recycling regulations, infrastructure, and

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behaviour of consumers vary from one country to the other (Dawson, 2017). Otherwise, it is the
plan of McDonald’s to provide the solution towards sustainable recycling and be part of change
influencers. In the meantime, however, the guest packaging is recycled in around 10% of the
entire store worldwide. However, there are certain locations where the food store recycles at
about 100% while others have just begun the initiative. Around 11 of 17 markets of McDonald’s
have begun the litter and recycling partnerships and programs (Chatman & Eunyoung, 2013, pg.
12).
On “Investing in Individuals”; The Corporation has come up with measurable and specific
strategies for partnership with its stakeholders. Other bodies and the store itself agree upon the
strategies and goals to ensure that the needs of the stakeholders and business partners are met.
Meeting the partnership goals will ensure organizational success for McDonald (Pettigrew,
2015). Partnership success means increased success to the high-quality workforce, brand trust,
and improved reputation for the restaurant. Measures of the improved partnership will include
employment levels, accessibility of training, and improved workforce education. It, therefore,
means that the company is on the right track towards increased success even as it champions
globally for sustainable production. Therefore, the company requires partners to come on board
to help in advocating for youth employability as well as addressing other sustainable
development issues (Bruce, 2016).
In conclusion, the thesis statement of this activity has been proved by the fact that this activity
has discussed McDonald’s Corporation as the identified company towards the achievement of
the study objectives. The history of McDonald’s has been highlighted followed by the product
mix and marketing strategies of this company (Alvesson, 2012). Otherwise, the activity has also
touched on the tangible and intangible marketing elements. Two KPIs have been highlighted and

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analyzed as well with respect to marketing and organizational growth. All the measures of
improving partnership will include employment levels, accessibility of training, and improved
workforce education. It, therefore, means that the company is on the right track towards
increased success even as it champions globally for sustainable production (Alder, 2016).

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