McDonalds Marketing Strategies and Analysis Report

This report provides a comprehensive marketing analysis of McDonald's, examining its micro and macro environments. The report begins with an introduction and company background, followed by a micro analysis of customers, competitors, and the company itself. It then delves into a macro analysis, exploring political, economic, socio-cultural, technological, legal, and environmental factors affecting McDonald's. A SWOT analysis highlights the company's strengths, weaknesses, opportunities, and threats. The report further investigates McDonald's market strategy, including segmentation (demographic, psychographic, and geographic), targeting, and differentiation. The marketing mix (product, price, place, and promotion) is analyzed in detail, and the report concludes with recommendations and conclusions based on the findings. The analysis leverages tools like PESTLE, SWOT, and the 4 Ps of marketing to provide a holistic view of McDonald's marketing approach.

Running Head: McDonalds
McDonalds
Marketing Principle

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Contents
Introduction.................................................................................................................................................3
Company Background.................................................................................................................................3
Micro Analysis............................................................................................................................................3
Customer.................................................................................................................................................3
Competitor...............................................................................................................................................3
Company.................................................................................................................................................4
Macro Analysis...........................................................................................................................................5
Political...................................................................................................................................................5
Economical..............................................................................................................................................5
Socio-cultural..........................................................................................................................................6
Technological..........................................................................................................................................6
Legal........................................................................................................................................................6
Environmental.........................................................................................................................................6
SWOT Analysis...........................................................................................................................................7
Market Strategy...........................................................................................................................................7
Segmentation...........................................................................................................................................7
Demographic Segmentation.................................................................................................................7
Psychographic Segmentation...............................................................................................................7
Geographical segmentation..................................................................................................................7

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Targeting.................................................................................................................................................8
Demographic targeting........................................................................................................................8
Psychographic targeting.......................................................................................................................8
Geographic targeting...........................................................................................................................8
Differentiation.........................................................................................................................................8
Fast service..........................................................................................................................................8
Low Price products..............................................................................................................................8
High reach...........................................................................................................................................8
Positioning...............................................................................................................................................9
Marketing Mix.............................................................................................................................................9
Product....................................................................................................................................................9
Price........................................................................................................................................................9
Place........................................................................................................................................................9
Promotion..............................................................................................................................................10
Recommendations.....................................................................................................................................10
Conclusions...............................................................................................................................................10
References.................................................................................................................................................12

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Introduction
McDonalds is, globally, the largest fast food chain based out of the United States of America
(Forbes, 2017). The company is headquartered in California and has company owned outlets as
well as franchise in over 120 countries (The Guardian, 2013). As on 2016, McDonalds was a
proud owner of approximately 36900 outlets. The purpose of this report is to understanding the
marketing intricacies of McDonalds on a micro and macro level with the help of marketing tools
like PESTLE, SWOT and Marketing mix (4 Ps of marketing).
Company Background
McDonald was founded back in 1940 by brothers Richard and Maurice McDonald. The firm was
later purchased by their sole franchise distributer Ray Kroc. It is the world’s fourth largest
private employer with over 1.9 million employees across the globe (BBC, 2012). McDonalds is
currently conducting its business under the leadership of Andrew McKenna as Chairman and
Steve Easterbrook as president and CEO.
Micro Analysis
Micro analysis of any organization predominantly talks about analyzing elements inside the
organization (Forbes, 2017).
Customer
Customers of McDonalds primarily include families and children who appeal to the happy meal,
workers who wish to consumer burger on the go and students who are looking for inexpensive
fast food joints (McDonalds UK, 2017).
Competitor
Fast food market held a value of over USD 539 billion in 2016 (Global News Wire, 2016).
Hence the industry is filled with eminent players and who are consistently competing for market
share. Competitors of McDonalds are global fast food chains with a remarkable international
presence. Major competitors include KFC, Burger King, Subway, Pizza Hut, Domino’s Pizza,

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and Taco Bell etc. The following figure elaborates on world’s top 10 global fast food chains and
their brand value (Statista 2017).
Figure 1: Brand value of fast food brands in 2017
Company
The company McDonalds is a well-established name in the world. Being a part of the food
industry, it consistently aims to improve its quality and follows stringent procedures to maintain
the value of their brand. The key strengths of McDonalds includes its wide reach and high brand
awareness. McDonalds has outlets in over 120 countries and the brand has brilliantly managed to
maintain consistency throughout the globe along with customizing the product according to
different countries using the strategy of ‘Think Global, Act Local’ (Forbes, 2014). Due to its
high reach, the brand’s TOMA (Top of mind awareness score) is very high and leads to repeated
buying (CNBC, 2015).

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Like every coin has two sides, McDonalds’ weaknesses lie with the extreme rigidity of its
process. McDonalds’ procedures are similar in every country where the brand operates. This may
lead to frustration among employees and the company therefore takes time to respond to market
variations. Another weakness that McDonalds is faced with is lack of customization. Products of
the brand are highly standardized in every country, this leaves less room for customers to modify
their products according to their taste buds.
Macro Analysis
Macro Analysis of the firm throws light on various factors affecting the companies’ productivity
outside the company.
Political
Fast food industry faces issues from the government whose aim is to reduce the fast food culture
and reduce obesity especially in Singapore (Pacific Health Summit, 2008). The health promotion
board of the country often indulges in promotion of a healthy lifestyle and organizes various
events to discourage junk food eating (Health promotion board, 2014). By doing this they
indirectly end up De-Marketing fast food chains like McDonalds. Company must secure its profit
Political
Government aims to reduce
obesity in the country.
Economic
slowing economy
Unsustainable GDP
reducing demand
Socio-cultural
increasing fast food culture
increasing culture of take
aways
technological
McDonalds app
Online delivery
tie up with Deliveroo, Food
panda, uber eats etc
Legal
Health and safety rules
quality checks
Environmental
Increasing compeition
All players fighting for market
share

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margins in every country after detailed study of the political scenario in that country as it tends to
affect the company’s bottom line.
Economical
Signs of a weak economy have been present in Singapore in the recent years and this is
evidenced by empty malls and low sales. According to government data, Singapore showed the
worst slowdown in the last four years (South China morning post, 2016). Singapore’s gdp might
be growing slowly but that growth is not sustainable. In the future, the forecasted growth rate is
close to 1% which is really low (Channel News Asia, 2017). This slowing of economy leads to
lesser demand of products which is expected to hurt businesses like McDonalds as they are not
necessary goods.
Socio-cultural
The socio-cultural environment is best suited for McDonalds as the consumption of fast food is
growing. People have longer working hours and both the partners have jobs. This makes them
increasingly dependent on the fast and handy availability of McDonalds. However, a lot of
people are also now shifting to a healthier lifestyle so in order to secure its position in the future,
McDonalds should come up with healthier options. It gives positive impact on the operations of
the business and also helps to maximize the sales (Sachdeva, 2015).
Technological
In the current scenario most people are well versed with technology in fact most people prefer
ordering their food online or via mobile apps. Any restaurant which is not available on these
platforms automatically has a competitive disadvantage. McDonalds has tied up with delivery
apps including Zomato, Uber Eats, Deliveroo, Food Panda and Gourmet to go etc. Competitors
of McDonalds like KFC and Burger king are also technologically averse hence to gain an
advantage, McDonalds can work on increasing the speed of delivery and quality of servicemen.
The company should also use the updated technology, so that the customer can feel comfortable
to purchase the product (Galician, 2013).

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Legal
McDonalds must operate all its functions under the health and safety legal framework of
Singapore. Recently, Indian government closed down over 160 outlets of McDonalds due to
failure to meet food quality standards (CNBC, 2017). In order to avoid such law suits, company
should also take into consideration all the controls that are essential by the health agency (Percy,
2014).
Environmental
The fast food market is very competitive in Singapore especially with the rise of so many players
in the industry. Fast foods are made available at a low price and a high reach. All the brands are
currently competing to gain market share. In order to survive the competition, it is imperative
that McDonalds comes up with plans of product differentiation (Mukhopadhyay, 2017).
SWOT Analysis
Strengths
Reliable Suppliers
brand name
standardised procedure
fast delivery
land owned by the company
higher reach - number of outlets
low price products
Weaknesses
less customization
reducing marker share
franchise model leaves less power to the
owners
lack of healthier options
Opportunities
Product innovation
Attrative outlets can be created
increase in 24 hour open outlets
offering healthier food options
Threats
slowing economy
switch to a healthier lifestyle
increasing obesity
increasing number of competitors

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Market Strategy
Segmentation
Market segmentation refers to dividing the market into various segments as per the needs of the
consumers. This makes it easier for companies to target. This segmentation can be done on
several factors, McDonalds in Singapore should segment the market into three different bases
(Paul & Roy, 2014).
Demographic Segmentation: Considering demographics, McDonalds should segment the market
into various age groups, working and non-working professionals, income groups and gender.
Psychographic Segmentation: Psychographic segmentation is done on the basis of consumer
lifestyle, eating habits, religious beliefs and spending patterns.
Geographical segmentation: Geographically segmentation is done on the basis of livelihood in
the area, genre of people, income class inhabiting the area and distance from competitors.
Targeting
Demographic targeting: McDonalds specifically targets students during the day as they are often
on the lookout for low price food eating joint. Office goers who need a quick and convenient
breakfast option on the go are targeted during the wee hours of morning. And families with
children have been targeted specially after the introduction of happy meals which comes with a
toy.
Psychographic targeting: People who are not very health conscious and believe in a very
convenient lifestyle are targeted by McDonalds. People whose eating habits involve eating out
often find McDonalds as one of the most convenient options due to its high reach and
comfortable culture. Basing on the income group, low income group people are also efficiently
targeted by the brand due to availability of low price food items.
Geographic targeting: McDonalds often launches its stores close to schools and colleges in order
to target students. Many Malls like Tampines, Hougang, Pioneer, Riverval and Bedok have a

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McDonald outlet because of the high footfall there. Various office quarters also have McDonalds
facility specifically targeted to serve office goers who require a quick snack between breaks.
Differentiation
Product or service differentiation refers to the art of distinguishing the brand from its customers.
This is essential in the competitive scenario that exists today. McDonalds’ biggest differentiation
strategies are as below:
Fast service: Today in the world of business and extremely tight schedules, McDonalds takes
immense pride in the speed of its service. This high speed is achieved with the help of high
standardization and hiring efficient staff.
Low Price products: In the slowing economy and decreasing buying power of consumers,
McDonalds offers quick snack options at a low price. This helps in increased market share by
targeting more consumers.
High reach: McDonalds, today, holds the highest market share in in the fast food industry owing
to its high number of outlets across the globe. Its international reach makes it a market leader and
increases its visibility to its customers.
Positioning
Positioning refers to the image that consumers have in their minds about the brand. This includes
what customers feel about the brand, how they perceive it and eventually will they buy its
products or not. McDonalds has positioned itself as a low price fast food joint that has a very
high reach in the country as well as internationally. McDonalds boasts of high quality products
and is most suited for people who are not very health conscious and believe in a convenient
lifestyle.
The logo and mascot of McDonalds have helped the brand gain high awareness and ability to
recognize. The arch shaped logo and bright yellow and red colors make the logo visible from a
distance. The mascot, Ronald McDonald is a clown seated outside every McDonald outlet and
highly appeals to children.

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Marketing Mix
Product
Product is defined by the primary offering of a company. Product offered by McDonalds are low
cost, appealing to taste buds burgers, fries and wraps. Their menu is changed as per the needs of
the local market. Certain outlets are kept entirely vegetarian keeping in mind the local
preferences of the consumers. The product is standardized and is prepared in the same manner all
over the globe, this gives McDonald’s food a consistent taste irrespective of where it is eaten.
Price
The price at which the company sells its product plays an important role in defining its target
market, sales and company profits. McDonald’s products are priced less as compared to its
competitors, which gives the brand a price advantage. For Example, its Barbeque beef burger
with egg costs $4.5, Grilled chicken McWrap is priced at $6.20 and a simple cheeseburger starts
from a meagre $2.80 (McDonalds Singapore Menu, 2017). This makes McDonald a hot
destination for youngsters.
Place
McDonalds has over 36900 stores in over 120 countries. The company outlet is spread
throughout the cities which make them very accessible and easy to reach to the consumers (De
Mooij, 2013). Place plays a very important role in ensuring a high reach and increased visibility
of the brand. One of the smartest decision involved placing McDonalds’ outlets at the entry of
highways and close to schools and colleges.
Promotion
Promotion is one of the most important factor involved in increasing visibility of a brand.
McDonalds’ logo and mascot are used at every advertisement, billboard, signage and outlet. This
increases the ability of a consumer to recognize brands. Besides this, McDonalds has done
various television advertisements, newspaper ads and has worked on its social media visibility.
McDonald actively responds to its tweets and Facebook messages and creates a two way

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platform for customer. Attractive tagline ‘I am loving it’ is used by the company and has gained
a lot of traction.
Recommendations
McDonalds is a leading fast food store with a high market share and immense brand value. A
Few recommendation to McDonalds brand would be to firstly ensure a very high quality of food.
The industry of food and beverage survives solely on the basis of quality, if that is gone, nothing
remains. Secondly the brand should work on customization of products and increase its menu
options. Specifically introducing healthier snack options is extremely imperative in order to
survive the competition in the market and target the changing lifestyles of its consumers. Lastly,
efforts should be put in to increase the attractiveness of McDonald stores. At present, they are
very basic with no frills. This reduces the number of consumers who would otherwise be
interested in a dining out experience.
Conclusions
As is clear by the report, McDonald is huge brand and is doing fairly well for itself. It has a large
number of stores and a wide reach in over 120 countries. McDonalds has positioned itself as a
low price, high quality fast food brand aimed at serving people who appeal to a convenient
lifestyle. Specifically the brand target school and college students, office goers and families with
children. The biggest advantage of the brand lies in the consistency of its taste and ability to
localize as per every country. Another factor to McDonald’s advantage is that the land and
building of every outlet is owned by the company, this reduces costs of rent and secondly helps
make more money in franchise models for the company.
McDonalds must ensure that the quality of food served is up to the mark. McDonalds should also
work on making its outlets more attractive to appeal dine in customers. It should build more 24
hour open outlets, at least one in every city, as there is almost negligible competition in this
segment (overnight open restaurants) and is a great source of income by helping people’s
midnight hunger pangs. Lastly, an image reconstruction is called for as the logo, official mascot
as well as the ‘I am loving it’ tagline is being used since a long time. A change in brand