McDonald's Case Study: Marketing Analysis in the New Zealand Market

This case study examines McDonald's marketing strategies in New Zealand, focusing on its situational analysis through SWOT and PESTEL frameworks. The study explores the company's strengths, such as brand equity and product offerings, and weaknesses, including declining market share and slow growth. Opportunities like international expansion and threats like changing demographics and competitors are also analyzed. The report evaluates McDonald's marketing strategies, including segmentation, targeting, and positioning, providing recommendations for improvement. The study highlights the importance of understanding internal and external factors to enhance the company's revenue and market presence. The analysis also touches on the impact of political, economic, social, technological, environmental, and legal factors on McDonald's operations in New Zealand. Overall, the case study offers a comprehensive overview of McDonald's marketing challenges and opportunities in the New Zealand market.

Running head: MARKETING
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Executive Summary
The paper is based on the organization McDonald's, which has spread across the
world. There has been used of tools like SWOT analysis and PESTEL analysis to
look into the internal and external factors that have an impact on the company. The
company has also several marketing strategies that have been discussed in the
paper below. The strategies are discussed with the help of the segmentation,
targeting and positioning of the company. to have a successful running of the
company there must be situational as well as a marketing strategy that is discussed
throughout the paper.

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Table of Contents
Introduction...................................................................................................................3
Discussion....................................................................................................................3
Situational Analysis...................................................................................................3
SWOT Analysis of McDonald’s in New Zealand...................................................3
PESTEL Analysis of McDonald’s in New Zealand................................................6
Evaluation of marketing strategy..............................................................................8
Conclusion..................................................................................................................10
Reference List.............................................................................................................11
Appendix.....................................................................................................................13

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Introduction
The study and the management of exchanging relationship is marketing. It is
the business process wherein a relationship is developed with the customers
providing them satisfactory service. The prime task of marketing is to spread its
businesses and increase the revenue of the company. To increase the revenue of
the company, the company needs to set up a situational analysis finding the internal
as well as external factors that have an impact on the working of the company in the
particular company. The report is based on the marketing strategies that McDonald’s
need to strategies looking into the internal and external factors that affect its growth
in New Zealand (mcdonalds.co.nz 2019). There is an enormous growth in the food
and beverage industry in countries like New Zealand. McDonald’s has also
expanded its business worldwide including New Zealand. It has been first
established in the year 1940. It has its headquarters established in Oak Brook,
Illinois, and the United States. It has a revenue of 22.820 billion in the year 2017,
which has decreased by 7.3 % that was 24.622 billion in the year 2016 (Thompson
et al. 2017). It has employees around 235,000 by the end of 2018 (mcdonalds.co.nz
2019). McDonald’s has several competitions like Burger King Worldwide, Domino's,
Starbucks, Wendy's Company and several other famous companies. The company
has several franchises that serve food that is relevant locally. It has been spread in
more than 100 countries. McDonald’s is currently run by more than 90% of the
independent franchises all over the world.
Discussion
Situational Analysis
SWOT Analysis of McDonald’s in New Zealand
Helpful Harmful

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Internal
Strengths
 The successful introduction of
products
 Strong product offering
 Well planned operation
 Brand equity
 Consistency of food
Weakness
 Decline market share
 Weak product
development
 Taste of the product
 Slow growth
 Weak product
development
External
Opportunities
 Internal expansion
 Joint ventures
 Introduction of healthier food
 Servers only 1%
 Value proposition
 Expansion in emerging
markets
Threats
 Mature industries
 Changing demographics
 Health-conscious
customers
 Competitors
 The downturn in the
economy
Table 1: SWOT Analysis of McDonald’s
(Source: Created by the researcher)
Strengths
 The successful introduction of products: Successful roll-out of products
like smoothies, coffees, and burgers helped in the expanding of the business
of the McDonald's.
 Strong product offering: There has been an increased in the income of the
company with the product offering.
 Well-planned operation: The Company has spread to various countries
increasing the economy of the company (Bull et al. 2016).
 Brand equity: It is a well-known brand and is spread all across the world. It is
known for its popularity and the product it offers to the customers. Consistency of food: McDonald's has a good reputation and there were no
faults found in the products of McDonald's. Thus, the products produced to
the customers are worthy and good.

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Weaknesses
 Decline market share: There has been a decline in the number of shares in
the market, which has affected the revenue of the company. In the year, 2016
there was an income of around 24.622 billion, which decreased to 22.820
billion in the year 2017.
 Weak product development: Various products have been introduced by
McDonald’s yet the products are not strong enough to compete with the other
brands like Dominoes (Gürel and Tat 2017).
 Taste of the product: As mentioned earlier, McDonald's has much variety of
products but they are not as tasty compared to other products of different
other brands. Thus, there must be a change in the ingredients or the process
of production of the products.
 Slow growth: Compared to other brands there is a very slow growth of the
company. McDonald's serves only to 1% of the population, as a result, there
is a very less number of customers that can help in the increase in the profit of
the company.
 Weak product development: There have been several products that are
introduced by McDonald's but these products are not as healthy or tasty
compared to other products. Hence, McDonald's should produce products that
are healthy with taste, which will help to attract health-conscious customers
increasing the sale of the company.
Opportunities
 International expansion: There are several international areas of expansion
for McDonald’s that they can utilize for the expansion of business (Strang et
al. 2018). The taxation policy of many countries is quite flexible wherein they
can help in the development of the business.
 Joint ventures: McDonald’s has a huge chance of expanding its business
with joint ventures with retailers.
 Introduction of healthier food: The products that are sold by McDonald's
are hardly healthy and there are a large number of customers who are health
conscious.

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 Servers only 1% of the population: McDonald’s has a very less number of
customers as there are limited McDonald’s restaurants compared to other
brands (Baycheva and Wolfslehner 2016).
 Expansion in emerging markets: It can expand is countries like India and
China that has emerging markets.
Threats
 Mature industries: Companies that are old enough and mature has a large
number of customers and competing with those companies McDonald's need
to be strong enough.
 Changing demographics: The change in the demography also has an
impact on the sale of the product (Mhurchu, Mackenzie and Vandevijvere
2016). People get bored eating the same products repeatedly thus the
introduction of new products helps in a change in the taste.
 Health-conscious customers: Some customers have become very health
conscious and do not like to consume foods that are not good for health
(McDonald and Rogers 2017). Hence, the introduction of healthy products
helps in attracting new customers.
 Competitors: Many companies in the market have a large number of
customers and revenue. Competing with those, companies is tough.
Moreover, there are also new brands emerging, which are strong enough to
compete with McDonald’s.
 The downturn in the economy: The retailer sales can be affected by the
recession or downturn in the economy.
PESTEL Analysis of McDonald’s in New Zealand
The PESTEL analysis is a framework that looks into the external factors affecting
the company’s business. It looks into the political, economic, social, technological,
environmental and legal factors of the country. A company looks into before
establishing a business or for increasing the revenue of the company on these
external factors (Alava and Mu 2018). These factors depend from country to country
and also affects the revenue of the company.
 Political: The political aspect analysis the political situation of the government
and the effects of the politics on the business. The rate and the development

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of a company depend on government intervention. There are various factors
such as an increase in the international trade agreement is an opportunity for
McDonald's (Koslow et al. 2016). The production of unhealthy food may be a
threat to the company and there can be changes brought in the government,
which can affect this factor. The political factor can affect the global supply
chain of the company. The health factor can be an important factor, for
instance, if a government decides to make changes in the food industry due to
an increase in the number of obese, it can hamper the revenue of the
company.
 Economical: The economic changes directly or indirectly affect the revenue
of the company (LOPEZDOMINGUEZ and LEVYA 2019). Slow yet stable
development of the company in developed countries, an increase in the
growth of the developing countries and slowing down in the Chinese economy
has an impact on the local economic influence. The company develops the
most n countries where there is stability in the economic condition of the
country.
 Social: The social trends influence the consumers buying of the product. The
increase in the disposable income of the country affects the revenue of the
company. The sales are also affected by the busy lifestyle in urban areas.
People prefer buying fast foods in places where they are busy and want to
save time (Mhurchu, Mackenzie and Vandevijvere 2016). Cultural diversity
and a healthy lifestyle also effect the revenue of the company. In countries
like New Zealand, where people are more health-conscious expect food that
is healthy instead of food that makes people unhealthy.
 Technological: McDonald's has a moderate research and development
activity in countries like New Zealand. The research and development
activities as an opportunity for the company. McDonald's has opportunities in
developing the research and development of countries like New Zealand. The
increase in business automation also has an impact on the business of the
company. Companies are linking up with different food delivery app as well as
creating an application for food delivery, if a country lacks in the technological
improvement it will have an impact on the business (Perera 2017). Thus,
there is a requirement for the advancement of technology in the countries

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where McDonald's wants to develop for its increase in the revenue of the
company.
 Environmental: Some factors affect the environment depending on the
business. McDonald's does excessive use of water; this affects our
ecosystem and the environment. There is also excessive disposal of wastes
in air. The wastes must be filtered before disposing of it. The climatic
condition is also another factor that affects the working of the company. As
there is no use of a company that sells sweaters in an area where there is hot
weather. Thus, McDonald's needs to change its product depending on the
climatic condition of those areas (Lees Winchester and Silva 2016). As the
weather of New Zealand is cold throughout the year, warmer products are in
more demand rather than cold drinks.
 Legal: The legal factors play a vital role in the expansion of the business in a
country. The increase in health consciousness has made different changes in
the legal structure of the countries (Vandevijvere 2017). Some countries have
brought changes in the legal structure due to some health regulation factors.
Apart from that there have been several rules such as there must not be any
sort of experiment on the animals and the animals should not be harmed.
There are also areas like the minimum wedge, working days, the working hour
that effects the working of the business.
Evaluation of marketing strategy
To make a product known to everyone, there is a requirement for marketing
the brand. There must be strategies for the marketing of the product. Marketing
helps in the increase of the revenue of the company (Kotler et al. 2015). To divide
the goods, products or services, segmentation, targeting, and positioning are the
strategic models that are used by organizations.
Segmentation
Segmentation depends on the various factors like demography, geography
and behavioral factors of the area. The demographic segmentation of the market has
worked in a great way for McDonald's in a different part of the world ( Camilleri 2018).
The segmentation is based on geography, demography, behavioral and
psychological factors. The geographical factors depend on the region and density of

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the country. For instance, in countries like New Zealand, where the population is not
much crowded, the ratio of buyers will be less compared to countries like China or
India. The demographic factor consists of the age, gender, life-cycle stage as well
(Abratt and Bendixen 2018). As McDonald’s is a company that provides fast food, it
targets areas that have many youths. Moreover, fast food is being opted by men
more often than women are, as women are much health-conscious than men (Baker
and Saren, 2016). McDonald's has created several areas and games for the kid that
shows that areas with a large number of children will be more attracted compared to
countries with the older generation. The income of the people of the country also is
an important factor for companies like McDonald's (Dudovskiy 2016). It also depends
on the person's behavior of purchasing the product, factors like costs.
Targeting
McDonald's is a brand that has been serving to a young population. It mainly
targets those areas that have a large number of the young population below the age
of 40 or 45. There have been restaurants that provide party rooms for organizing a
birthday party for children. McDonald's have products that are mostly opted by the
children or the youth. Thus, McDonald’s must establish its business in areas where
there is a large number of young generations (Abratt and Bendixen 2018).
McDonald’s mainly targets children in specific countries. It provides gifts that are
mostly for children. It also looks into the aspect of income of the particular country, if
the GDP of the country is high then there is a chance of a higher rate of customers in
the country. Moreover, countries with a higher number of employed have a source of
income, which means there are chances of, people visiting costly stores (Camilleri
2018). Thus, it can be said that McDonald’s targets countries with a higher number
of youth especially children as well as with high GDP.
Positioning
McDonald’s has been fighting with its rivalries like KFC, Burger King, Wendy's
worldwide to establish a stable business. It uses social media as a platform for
advertising and uses billboard for positioning the brand against its rivalries. It has
also used television, radio as well as a newspaper for advertising. It positions based
on the mind-set of the customers of the country
(Andaleeb 2016). It not only sells fast food but also has an independent no-profit

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organization for finding, creating and supporting the program for the improvement of
the health and well-being of the children. The non-profitable organization is named
as Ronald McDonald’s House Charities. This organization has an impact on the
customers and it made McDonald’s stand against its rivalries. It uses the prising
strategy as a tool for positioning its brand as well as the product in the mind of the
customers. McDonald’s positioning strategy is outstanding from the initial stage
(Camilleri 2018). They have created a unique image in the mind of the customers for
competing with other brands.
Conclusion
The paper is an elaborate description of the marketing procedure of
McDonald’s. The SWOT Analysis and PESTEL Analysis is the situational analysis
that successfully helps the company understand the external as well as the inter
factors of the company. It enables the company to understand the market where it is
established. With SWOT analysis, the company finds the internal as well as external
areas to expand or to strategies plans for improvement of the company. SWOT
analysis provides an analysis where the company has an opportunity to develop and
create risk management plans for the threats. The PESTEL Analysis gives the
company view of the external affairs that have an impact on the company. With the
PESTEL analysis, the company has an overview of the political, economic, social,
technological, environmental and legal factors that have an impact on the company.
To run the business successfully, the company must also have marketing strategies
that have been analyzed with the use of segmentation, targeting and positioning of
the company. The STP helps in recognizing the areas where there will be a
successful development of the company.

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