Marketing and Markets in a Digital World: McDonald's Case Study

This report examines McDonald's marketing strategies in a digital world, focusing on addressing declining sales. It begins by providing background information on McDonald's, including its franchising model and brand image. The report then analyzes the situation at the start of the case, highlighting the challenge of declining sales due to health-conscious consumers and franchisee concerns over remodel investments. Porter's Five Forces are applied to assess the competitive landscape, revealing high competitive rivalry, buyer power, threat of substitution, and threat of new entry. The marketing mix (product, price, place, promotion) is analyzed to identify potential solutions, such as introducing new products, adjusting pricing strategies, strategically expanding locations, and enhancing promotional activities. The report suggests focusing on digital marketing strategies to reach customers effectively and improve overall profitability. Desklib offers similar solved assignments and resources for students.

Marketing and Markets
in a Digital World

Executive Summary
Marketing and Markets in a Digital World refers to the use of marketing and strategies
and techniques in such a way so a large number of customers can be reached and they can be
satisfied by fulfilling their needs and requirements. Digital marketing strategies and techniques
are also recommended to be used because in a Digital World they are helpful for the purpose of
reaching the customers and ensuring that the identification of the way in which their satisfaction
level can be raised can be done so that the company is able to make sure that the enhancement in
its overall profitability level can be carried out.

Table of Contents
INTRODUCTION...........................................................................................................................1
PART A...........................................................................................................................................1
Background..................................................................................................................................1
Situation at the start of the case...................................................................................................2
Porter's five forces ......................................................................................................................3
Marketing Mix.............................................................................................................................4
The solution ................................................................................................................................6
PART B............................................................................................................................................8
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................14

INTRODUCTION
Marketing and Markets in a Digital World means using the wide variety of methods and
techniques through which the management of a wide range of activities can be carried out so that
the products of the organization can reach the customers in market. Therefore, it is quite
important and essential that the use of the right methods and techniques can be made for
attaining the future goals and objectives (Camilleri, 2020). It is necessary for the managers that
they are able to make the use of the appropriate strategies and techniques. This report is based on
McDonald's. It is an American Fast Food Company which provides a wide range of food
products to its customers in the market so that their satisfaction can be ensured. In this report, a
detailed and specific discussion will be made on the Background, Situation at the start of the
case, Analysis of Porter's five forces, Marketing Mix. Additionally, The Solution will also be
discussed as a part of this assignment.
PART A
Background
A main Marketing challenge which is being faced by McDonald's is the Declining Sales.
It is quite an important challenge because it is directly linked with the overall level of
profitability of the organization (Cavlak and Cop, 2021). Therefore, it can be stated that due to
this particular challenge an impact is created on the overall level of sales as well as profitability
level of the organization.
McDonald's is a U.S. Based organization. It has a wide range of food products which it
can provide to the customers. Thus, it is a company which has expanded in the different
countries all across the globe through making the use of Franchising Model.
The company is able to make sure that the fulfilment of the needs and requirements can
be carried out in a proper way (Cochoy and et.al., 2020). Thus, the attainment of the goals and
objectives can be done quite effectively and efficiently.
The company operates its business through various franchises in the world in different
countries. In this way, the company is able to make sure that it can help in managing the wide
range of business needs and requirements in quite a proper way. The company has been able to
make sure that it has created a strong Brand Image and Goodwill in the market for the purpose of
the attainment of the goals and objectives in the future.
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The company is quite famous among the young people because of the tasty food products
which are offered by it and the catchy slogans which it uses. Therefore, in this way it can be
stated that the company is able to make sure that it can enhance its sales revenues and
profitability in an appropriate way by targeting the young customers. This will be helpful for it in
ensuring that it makes a right progress in the market quite effectively and efficiently (Confetto
and et.al., 2020).
It is quite important and necessary for the managers of the company that they are able to
make sure that the management of the needs and requirements of the organization can be done by
introducing new products and services (Dash, Kiefer and Paul, 2021). Therefore, McDonald's has
been ahead in the use of Innovation and has made sure that the customers can be attracted in this
way.
Situation at the start of the case
McDonald's has been facing a particular problem of Declining Sales. This is creating an impact
on the organization because due to decrease in the level of sales the overall level of profits of the
company will be affected.
The Declining Sales of the company was due to the fact that the customers are nowadays
becoming quite health-conscious which has therefore reduced their tendency to frequently go out
for eating Fast Food. Therefore, in this way it has become the reason that there are lower number
of customers which is therefore impacting the company a lot (Fatin and Rahman, 2020).
Also, In the year 2018, the company faced significant headwinds from operators over
Experience of Future remodels, which franchises claimed were not resulting in significant
returns for the money which was put by them for redesign. Thus it was a major challenge which
was faced by the company because the investments which were made by the franchises were not
generating satisfactory returns (4 Challenges McDonald's new CEO must overcome, 2019).
Thus, in this way it can be stated that due to this particular reason the profits of the
company are reducing which is therefore creating a particular level of impact on the operations
of the company. It is therefore quite important for the organization that the corrective steps can
be taken so that the level of sales revenues can be enhanced thereby increasing the profitability in
a proper manner.
Therefore, it is required that the right steps are taken for the purpose of making progress
and thus it will therefore lead towards ensuring that the situation of the company is able to
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improve so that the company can get ahead of the different types of competitors in the market
quite effectively and efficiently.
Porter's five forces
This is a particular model through which the deriving of conclusions and
recommendations about the market can be done (Giunta, 2020). The analysis of these forces can
be done in the following manner-
 Competitive rivalry- This means the competition level prevailing in the market.
McDonald's faces a very high level of competition in the market because there are a large
number of competitors which are present in the market. Thus, it can be stated that this
force has a high power for the company in the market.
 Supplier power- This means the power of the suppliers in the market. McDonald's has
contacts with the different types of suppliers in the market and therefore in this way it can
be stated that the company can make sure that it can get its supplies from any supplier
which it wants. Thus, it can be stated that this particular force has a low power for the
company in the market.
 Buyer power- This means the power of buyers in the market. Therefore, it can be stated
that the various types of buyers can create an influence on the level of sales of the
organization in the market. McDonald's has a wide base of customers in the market and
therefore in this way it can be stated that the company can make sure that the different
types of buyers in the market are satisfied with its products. The customers of the
company can help it to be able to make the right progress in the market. Therefore, it can
be stated that this force has a high power for the company.
 Threat of Substitution- This refers to the power of substitute products in the market.
McDonald's has various substitutes in the market and therefore they can be preferred by
the customers because of the cheaper price. Therefore, in this way it can be stated that
this particular force has a high power for the company.
 Threat of New Entry- This refers to the power of the new entrants in the market. In the
context of McDonald's, it can be stated that the new players can enter into its market and
therefore can create a particular level of influence on its level of operations. Thus, in this
way it can be stated that this particular force has a high power for the company.
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Justification- 4 out of 5 forces have a high power for the company and the remaining 1 force has
a low power. Thus, in this way it can be stated that the company has to reframe its strategy to be
able to obtain a strategic and competitive advantage in the market so that it can make a right
progress quite effectively and efficiently in a proper way in the future. Thus, it is necessary for
the organization that it properly analyses the influence of these particular factors on the level of
operations effectively and efficiently in a proper manner. This will be helpful in ensuring that the
situation of low sales can be managed quite appropriately. Therefore, in this way the right and
appropriate steps can be taken for the purpose of attainment of the goals and objectives in the
future in a right and proper way. This will be helpful in effectively and efficiently dealing with
this situation and taking the corrective steps in a proper and right manner.
Marketing Mix
The Marketing Mix is quite important for the organizations and thus it is highly necessary that its
analysis is carried out so that the right conclusions and recommendations are drawn in a proper
manner (Hulland and Houston, 2020). Therefore, for an organization like McDonald's it is
necessary that the analysis of the 4 P's of marketing can be carried out. The analysis of these 4
P's can be done as follows-
 Product- It refers to the product of the organization which it is offering to the different
types of customers in the market. McDonald's offers different types of products to the
customers and therefore in this way it can be stated that it is able to make sure that these
products can help in the enhancement of the overall satisfaction level of these customers.
Thus, it can be stated that for finding a solution to the problem of declining sales, the
company must bring in a new range of products which can suit the needs and
requirements of the customers.
 Price- It refers to the price of products which is required to be paid by the customers of
the organization. In the context of McDonald's, it can be stated that the company is
required to change its pricing strategy in the future so that it can make sure that it is able
to manage its needs and requirements quite appropriately in the future. The managers of
company should be able to make the use of Competitive Pricing Strategy so that the
prices are set according to the prices charged by the competitors in the market which will
therefore help the company to be able to take the necessary actions to solve the problem
of declining sales.
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 Place- It refers to the location of the Business where it carries out its activities.
Therefore, for an organization like McDonald's it becomes quite important that the
company is able to make sure that it can identify the way in which it can strategically
target the wide range of customers in the market. This will help it to be able to attain the
necessary goals and objectives in the future. The management of the company should be
able to identify the strategic places of expansion where it can expand so that the profits
can be enhanced thereby solving the problem of declining sales.
 Promotion- It refers to the wide range of promotional activities through which the
Businesses can make sure that they are able to attain the goals and objectives in the
future. For McDonald's, it is absolutely necessary that it makes the use of these particular
activities for the particular purpose of identifying the needs and requirements to be
fulfilled in the future and taking the right decision in a proper way. The managers of the
company should identify the aggressive promotional strategies to be used so that the
customers can be targeted which will therefore help in dealing with the needs and
requirements of the customers. This will be useful in solving the problem of declining
sales.
The reason due to which 4P's model is being used is that through making its use the organization
can identify the way in which the different types of customers can be targeted which will
therefore be quite helpful in ensuring that the right methods and techniques of enhancing the
profits can be used in a right way. Thus, through making its use it can be ensured that the
problem of declining sales can be solved because using appropriate marketing strategy will allow
McDonald's to be able to identify the way in which the sales can be enhanced so that the
revenues can increase which will therefore help it a lot in attaining its future goals and objectives
in the market.
Thus, in this way it can be stated that the management of McDonald's has to make sure
that the use of the Marketing Mix has to be done appropriately so that it can be ensured that the
company is able to take a strategic and tactical approach for the particular purpose of enhancing
the level of sales in the market which will thus help in increasing the overall level of profits quite
effectively and efficiently (Kumar and et.al., 2020).
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The solution
It is quite necessary that the right solutions are developed by McDonald's which can help
it to be able to solve the issue of Declining Sales (Mogaji, Soetan and Kieu, 2020). Some of
these solutions are explained as follows-
 The management of McDonald's became innovative and brought new products in the
market to attract the customers who were shifting to the competitors. In this way, the
company was able to make sure that it solved the issue of Declining Sales because the use
of Innovation helped it to be able to bring back the customers which increased the sales
and ultimately helped in enhancing the revenues.
 The managers of McDonald's identified the way in which the Market Segmentation had
to be done. This helped in creating better segments of the market which can be targeted
and therefore in this way this helped in generating of more revenues and solved the
problem of Declining Sales.
 The management of McDonald's made sure that it was able to bring attractive offers for
the customers so that the revenue generation enhanced thereby leading towards more
profits. Therefore, in this way it can be stated that for the company solved the problem of
lack of returns to its franchises.
 The managers of McDonald's identified the areas where the chances of getting returns
was higher. Expanding to such areas was helpful for the company to be able to make sure
that it solved the problem of lack of returns to its franchises.
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PART B
Technological changes are those changes which are important for an organization
because the changes in technology are required to be quickly accepted and implemented for
ensuring the satisfaction level of the customers in the future (Özoğlu and Topal, 2020).
McDonald's therefore has to make sure that it accepts and implements these particular changes so
that it is able to make sure that the management of the needs and requirements can be carried out
in a proper manner. Thus, it is quite important from the point of view of the managers of the
organization that they can effectively and efficiently help in the attainment of the goals and
objectives.
There are various types of technological changes which can happen in the market. Thus,
it becomes quite necessary that the implementation of these changes can be done in a right way
(Pucihar, 2020). The way in which these technological changes can impact the Markets and
Marketing activities of McDonald's are as follows-
 There has been an increase in the online orders which are being received at the
restaurants. This is the latest trend which has developed within the market in the recent
few years. In this way, it can be stated that the technological changes are quite important
for the managers of McDonald's here so that the adjustments can be made appropriately
and thus the increase in the level of sales can be carried out in quite a proper manner.
 Advanced Promotional Techniques are being used nowadays which are therefore helpful
in ensuring that the promotion of the products and services can be done in quite an
appropriate manner quite effectively and efficiently. Therefore, the mangers of
McDonald's have to ensure that the use of these particular promotional techniques can be
carried out for attaining the goals and objectives in the future.
Further, there is an importance of making the use of technology in the organizations so that they
can identify the way in which the different types of changes can be implemented in a right way
so that the attainment of the marketing goals and objectives can be done (Purwanti, 2021). The
explanation of the importance of technology can be done as follows-
 Through making the use of technology the marketing activities can be tracked in a better
manner (Rashid and Ratten, 2020). Therefore, in this way it can be stated that through
making its proper use the organizations can make sure that they are able to make the
required level of improvements quite effectively and efficiently in a right way. This will
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