ECOM-301 E-Marketing: McDonald's Digital Strategy in Saudi Arabia

This report analyzes McDonald's e-marketing strategy for launching pan pizza in Saudi Arabia. It includes a situational analysis using SWOT, industry analysis via Porter's Five Forces, and projections on market demand. The report details market and cost analysis, segmentation and targeting strategies, and positioning in the marketplace. It also covers procurement, customer acquisition techniques like online advertising, and the application of market tools, branding, and video marketing. Furthermore, it discusses email and social media marketing, e-commerce tools, web-enabled supply chains, SEO, and the use of web applications for logistics outsourcing, cloud computing, and CRM. The report concludes by considering the scope and limitations of electronic media in this context. Desklib provides access to similar solved assignments for students.

E-Marketing
11/5/2018
McDonald

E-Marketing 1
Contents
Introduction......................................................................................................................................3
Overview of the company............................................................................................................3
Situational Analysis.........................................................................................................................4
SWOT analysis............................................................................................................................4
Strengths..................................................................................................................................4
Weaknesses..............................................................................................................................4
Opportunities...........................................................................................................................5
Threats.....................................................................................................................................5
Industry analysis..........................................................................................................................6
Projections on market demand.....................................................................................................7
Market and Cost Analysis................................................................................................................8
Segmentation analysis and strategy.............................................................................................8
Targeting strategy........................................................................................................................9
Positioning in the marketplace.....................................................................................................9
Procurement of goods and Services...........................................................................................10
Major customer acquisition techniques, online advertising, ad serving and targeting..............10
Market tools and Application........................................................................................................11
Core Marketing Concepts and define the value chain...............................................................11
Use of Branding and video marketing.......................................................................................12

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Email Marketing and Social Media Marketing.........................................................................13
Available tools of E-Commerce................................................................................................13
Web-enabled Supply Chains..........................................................................................................13
SEO and Search engine marketing............................................................................................13
Use of Web application for the outsourcing of logistics services.............................................14
Cloud computing and Customer Relationship Management.....................................................14
Scope and limitations of electronic media.....................................................................................15
Conclusion.....................................................................................................................................16
References......................................................................................................................................17

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Introduction
The aim of the report is to understand the digital marketing of the McDonalds to launch the new
product in the market of Saudi Arabia. The new product which is introduced by the company is
McDonald’s pan pizza. Currently, the company is offering a wide range of burgers with the veg
puff pizza and with this, it's high time that the company should offer pan pizza. In the current
era, every company make use of the digital market either small or large because of this the way
through which they can capture the huge market. Capturing of the market is the need of the
business with the rise in the competition among the companies.
The report includes the detailed situational analysis that can be done with the help of SWOT
analysis, industry analysis and projections on the market demand. Further, the market and cost
analysis has been done which helps in understanding the needs of customers in Saudi Arabia
with the cost that is associated with the operations conducted by the company. In addition, the
report includes market tools and their application with the discussion related to web-enabled
supply chains. Along with this, the report includes the strategies which are used to implement the
marketing plan which helps in tackling the competition present in the market.
Overview of the company
McDonalds Company is a well-known company who is performing the business operations
across the world with 36,000 restaurants in more than 100 countries (McDonald's, 2018). The
company came into existence in the year 1940 and was founded by two siblings Richard and
Maurice McDonald. In Saudi Arabia, the company offer the breakfast menu, McSaver options or
value meals in their stores (McDonald's, 2018).

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Situational Analysis
Situational analysis refers to as the collections of methods that are mainly used by the managers
to evaluate the internal and external environment which helps in understanding the capabilities,
customers and the business environment of the company for their new product. Similarly,
McDonald manager applies the situational analysis which is discussed below: -
SWOT analysis
SWOT analysis is a strategic planning technique which is used to analyse the organisation
strength, weakness, opportunities and threats.
Strengths
Largest fast food market share: - McDonald’s biggest strength is its largest and rapidly
growing fast food restaurant chain in terms of the 35,000 outlets with 71 million customers on
daily basis in more than 100 countries. The pan pizza of the McDonald’s company will
contribute to increase the market share.
New Variety: - McDonald new pan pizza burger as a product will help the company in
satisfying needs of the customer. The customers of the company love the products that are
offered by the company due to which they start liking the new pan pizza of McDonald.
Weaknesses
Negative publicity: - Company can face the criticism for offering unhealthy pan pizza with the
base of Maida to their customers in the market as this unhealthy food leads to obesity mainly
among the children’s.

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High turnover of employees: - McDonald's is dealing with the issue of high employee turnover
because of the low skilled and low paid jobs which affect the goodwill of the company. The
negative factor leads to the issue for the company while hiring the chefs who will make pan
pizza for the company (Armstrong, Adam, Denize and Kotler, 2014).
Opportunities
Demand healthy food: - In the current trend, the demand of the customers are shifting towards
the healthy products which lead to an opportunity for the company as they should offer healthy
pizza with different bases of Oats, Atta and other and mixture of vegetables to their customers in
the market of South Arabia.
New practice adoption: - Company has the opportunity to adopt for the best practice in a
restaurant because this will help the company to increase the sales. This is the fact that changes
bring positive growth options for the company (Baker, 2014). For example; the company
redesign its logo design and restaurant which leads to rise in approx. 9% to 10% of customers.
Therefore, the introduction of the new product pan pizza in the market will work as a new
practice of the company.
Threats
Currency fluctuations: - Company has their operations across the world and the major
fluctuation in the currency affects the profit that they can earn from pan pizza of McDonald.
Majorly, the changes in the dollar play a vital role for the company.
High threats of competition: - In the market of Saudi Arabia, there are different companies who
offer pan pizza in the market. The rise in the number of companies is leading threat for

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McDonald. Along with this, companies like pizza hut, dominos and others also lead to threat
competitors.
Industry analysis
Industry analysis is a tool that offers the company in understanding the position related to the
other companies for similar products and services. Porter’s five forces framework is a tool for
analysing the competition among the business in the industry.
Porter’s Five
Forces
Description
Bargaining power
of suppliers
There is present of plenty of suppliers but they remain depended on the
imports. McDonald needs to form the contact with the suppliers for the
pizza raw material. The company is a well-known company due to which
they can easily get the suppliers who can offer them raw material which
shows that there will be low bargaining power.
Bargaining power
of customers
The customer maintains the high bargaining power in Saudi Arabia as
there are presence numerous restaurants which makes the customers shift
towards the restaurant that offers the best quality with cost. Thus, the
company might find high bargaining power for their pan pizza because it
is one of the popular products.
The threat of new
entrants
The threat of the new entrants is limited because the company is well-
known and have a good reputation in the market which makes them
trustworthy brand. This will reduce the opportunity of new entrants as
well as the new companies will be looking for the high amount of

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investment which is a barrier. In addition to this, the new entrant will also
find the bureaucratic regulations that might work as huddle for new
entrants.
Availability of
substitutes
The availability of substitutes is high which include burgers, sandwiches,
and many other fast food items that can prefer by customers in the place
of pan pizza. Thus, McDonald's company find the numerous substitutes
that can affect the operations of a new product.
Competitive rivalry The competitive rivalry is intense in the market with the availability of
many restaurants offering pizza. This includes pizza hut, dominos and
many others who offer the same sort of pizzas.
Projections on market demand
The demand forecasting includes the prediction related to the requirements and needs of the
customers for the particular product. The introduction of new product needs the McDonald’s
company to analyse the forecast the demand.
This has been found that Saudi Arabia Foodservice market was valued USD 29.83 billion in the
year 2017 and further it is expected to record a CAGR of the 5.9% growth in the year of 2018-
2023. In addition to this, this has been found by 6W research that Saudi Arabia’s food market is
expected to reach at US$9 billion by the year 2023 (Hotelier Middle East, 2011). Most of the
people in the current follow the western culture which has brought the changes in their taste and
preferences towards the food. This leads to a rise in the consumption of fast food like burgers,
pizza, sandwich, pasta and many others. Thus, this shows the projections on the overall market
demand for fast food.

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Considering the analysis, this can be said that it is expected that the need for the pizza in the
market will increase definitely. Thus, this can be said that it is a good opportunity for the
company to bring the new product as the pan pizza as maximum people in the country will
demand this pizza.
Market and Cost Analysis
Segmentation analysis and strategy
Segmentation involves dividing the population into different groups considering the different
characteristics (David, 2011). McDonald’s company Segmentation for the new pan pizza product
will be done on the basis of: -
 Demographic: - Company segment the customers with the age of 8-25 and 25-45 as
these people include youth and adults who generally demand the pizza which includes
both male and female. In addition, the company segment the customer who falls under
the low and middle-income group.
 Behavioural: - This segment is preferred for the new products because the McDonald's
loyal customer will like to prefer the pan pizza offered by the company in Saudi Arabia.
There are many customers who consume fast food on a regular basis who would like to
prefer Pizza (Dawson, 2014).
 Psychographic: - McDonald’s generally segment the people who like to believe the
social class which include lower, working and middle classes.

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Targeting strategy
Considering the above segmentation, the McDonald’s company make use of the differentiation
strategy in which the company targets more than one segment (Frynas and Mellahi, 2015). Thus,
the company majorly targets people with the age group of 8-25 years which include youth who
like to consume fast food at a frequent basis with the middle-income group. This also includes
the people who are struggler, bachelor and mainstreamer as these people are loyal customers
who like to prefer most of the products offered by the company.
Positioning in the marketplace
Positioning refers to as the image of the company in the mind of customers. McDonald’s
company is positioned under the wide choice and healthy products (Grant, 2016). For the new
product pan pizza, they want to maintain the same positioning in Saudi Arabia. The pizza hut
company is the category of junk food with limited choices.
Procurement of goods and Services
The procurement of goods and services is one
of the essential steps that are required to be
fulfilled by the McDonald’s company for their new pan pizza (Kotler, 2015). The company make
use of the E-procurement system that is Emac Digital. Internet procurement site is designed by
the company to manage the more than 27,000 franchises. Emac Digital Company is considered

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as the E-procurement website that is jointly owned by the Accel-KKR Internet Co. and
McDonald’s. This procurement hub helps the global outlets of the company to procure the goods
and services. The site permits the business owner to buy the supplies and material at the low
price which reduce the cost. The outlets in Saudi Arabia can make use of this procurement
system which helps them to reduce the cost of pan pizza by 85% and helps them to meet the
needs of customers in the market.
Major customer acquisition techniques, online advertising, ad serving and
targeting
In the present market of Saudi Arabia, the company need to make use of different customer
acquisition techniques which helps them to grab the customers for their new products. The major
sources through which the McDonald can get the customers to include online marketing and ad
serving and targeting.
Online marketing
In online marketing, the company will put the marketing efforts with the use of the email and
web through electronic media. The online marketing includes the McDonald’s awareness for
their new pan pizza among the customers (Lovelock and Patterson, 2015). This mode is the
fastest mode which helps the companies to get the response from the customers which shows that

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it can grab the attention easily. Moreover, online marketing will allow the company to build the
personalised and strong relationships which are essential for the company to acquire maximum
customers for new product pan pizza.
Ad serving and targeting
Ad serving reflects the technology and services that place the advertisement related to the
product on the website. The ad serving helps the company to display the advertisement on the
website which grabs the attention of customers when they order online for the products of
McDonald's in Saudi Arabia. This is the way through which they can target the customers to
whom they want to offer the products (Luca and Suggs, 2010). Moreover, the website of the
company is the place from where the customers can grab all the details. Thus, ad serving is one
of the techniques which are used to acquire the customer’s attention towards new “Pan Pizza”.
Market tools and Application
Core Marketing Concepts and define the value chain
The marketing concept it refers to as the customer-centred sense and responds philosophy. The
major marketing concepts include product, selling, marketing and societal marketing. Out of
which, McDonald's major focus remains on the marketing of the products that can meet the
needs of the customers.
The value chain is referred to as the processor activities that contribute in adding the value to the
production and marketing activities performed by the company (Wilson and Gilligan, 2012).
McDonald’s needs to add the value that they are offering with the new product pan pizza. For