McDonald's Malaysia: Strategic Marketing Management & Planning

This report provides a comprehensive analysis of McDonald's Malaysia's strategic marketing management. It delves into the core principles essential for successful marketing, including strategic marketing analysis, objective setting, and the integration of online and offline strategies. The report covers key aspects such as PESTLE analysis, Porter's five forces, market segmentation, targeting, and positioning strategies. It also examines the marketing mix, encompassing product, pricing, place, and promotion strategies, while emphasizing the importance of understanding consumer behavior. The analysis aims to enhance McDonald's marketing competitiveness in the fast-food industry by evaluating the market environment and providing actionable insights for effective management and strategic decision-making. Desklib is a platform where students can find similar solved assignments and study tools.

Strategic Marketing Management
6/29/2018
McDonald’s Malaysia

Strategic Marketing Management 1
Executive summary
Strategic Marketing management is an immersion of the core principles which is essential for the
successful marketing of the company. In other words, it is a unique approach which is essential
to understand and then to leverage it to design integrated strategic marketing plan in online and
offline environments. The report is prepared on McDonald’s Malaysia which is one of the well-
known MNC that is operating the business in most of the areas across the world. The elements
which are majorly discussed in the report include principles of strategic marketing management,
tools that are essential to develop a strategic marketing strategy with the support of marketing
techniques. The paper also talks about the changes in marketing environment which are essential
to take the further steps for effective management.

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Contents
Introduction......................................................................................................................................4
Overview of company......................................................................................................................5
Mission and vision.......................................................................................................................5
PESTLE Analysis............................................................................................................................5
Political factors............................................................................................................................6
Economic factors.........................................................................................................................6
Social factors...............................................................................................................................7
Technological factors...................................................................................................................7
Legal factors................................................................................................................................8
Environmental factors..................................................................................................................8
Porter’s five forces...........................................................................................................................9
Segmentation, targeting and positioning.......................................................................................11
Market Segmentation.................................................................................................................11
Targeting....................................................................................................................................12
Positioning.................................................................................................................................12
Marketing Mix...............................................................................................................................13
Product strategy.........................................................................................................................13
Pricing strategy..........................................................................................................................14
Place strategy.............................................................................................................................14

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Promotion Strategy....................................................................................................................15
Understanding consumer behaviour..............................................................................................15
Conclusion.....................................................................................................................................18
References......................................................................................................................................19

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Introduction
The aim of the report is to present the understanding and skills of the company that helps them in
supporting the process of strategic marketing management. The senior manager of McDonald’s
company is looking to enhance their marketing competitiveness in the fast food industry. The
rise in the competitiveness of the company is possible with the help of the evaluation of the
market environment that can influence the working of the company in the Malaysia market.
Along with this, the analysis of the segmentation, targeting and positioning strategy which helps
the company in analysing the customers of the company to whom they offer their services. The
factors that influence the working of McDonald’s can be resolved with the help of the marketing
mix strategies which is linked with the mission and vision of the company. After implementing
the strategies the company should evaluate and monitor its effectiveness which is essential for
analysing the effect of strategies. In addition, the company need to understand the consumer
behaviour towards the purchase of company’s product.

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Overview of company
McDonald’s is world’s leading quick service restaurant chain with more than 36,000 restaurants
across the world. This is the reason the company has a strong customer base of 69 million
customers who visit on daily in over 100 countries. The company came into existence in the year
1955 and was founded by 1955. In Malaysia, market the company is serving to more than 13.5
million customers within a month (McDonald's, 2018). Along with this, it provides the
employment to more than 12,000 employees in its restaurants across the nation providing
training, development and career (McDonald's, 2018). The major product that the company offer
is Burger and along with this the company has started offering cold drinks, desserts, breakfast
and many others.
Mission and vision
Mission: - Mission of the company is to be making the customer favourite place and a way to
eat. Along with this, the company promise to simple easy enjoyment to every customer on every
visit.
Value: - Company inspires the people within the company who delight every customer with the
unmatched quality, service, cleanliness and the value every time (McDonald's, 2018).
PESTLE Analysis
PESTLE analysis is a well known analytical tool that is used by the company for strategic
business planning. The managers of the company analyse and monitor the macro-environmental
factors that directly lead to the impact on an organisation (Chernev, 2018). McDonald’s manager

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makes use of this analysis to analyse the external factors that can affect the working Malaysia
market.
(Source: Kotler, 2015)
Political factors
The political analysis includes government intervention in terms of the rules and regulations
(Kotler, 2015). In the Malaysia market, it has been observed that there is stability in the politics
and this is the only reason due to which the numbers of investors are increasing. Along with this,
the government offer the greater portion of foreign equity ownership. These government
interventions make Malaysia an appropriate tourist place due to which the numbers of visitors
are increasing which leads to the opportunity for the company as they will be able to get a
number of customers. Moreover, they can take the support of political interventions for further
expansion of a business.

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Economic factors
The economic factors include the influence of GDP, purchasing power, employment and many
other factors on a company. The economic freedom score of Malaysia is 74.5 which make the
economy the 22nd freest in the year 2018 Index. Considering the report of the HSBC, the
economy of the country will rise and the country will become the world’s 21st largest economy
by the year 2050 with the expected GDP of $1.2 trillion (Economic Freedom, 2018). The GDP of
Malaysia of the country is $1.002 trillion (PPP 2018 est.) and it is expected to rise. The rise in
the GDP of country results in the rise in purchasing power of country which is one of the
advantages for McDonald’s. Along with this, this rise brings the improvement and development
in the nation which helps the company to grow and expand their business (The World Bank,
2018). The rise in GDP affects positively to the company and this is the reason McDonald’s is
able to manage the sales and profit appropriately.
Social factors
The social factors are mainly related to the pattern and trend of demand which might take place
due to nationality, culture or religions within the country. Malaysia is also a multi-religion and
multi-culture country which includes 50% of the population who believe in Islam. McDonald’s
understand their culture of Halal and their presence which is more towards non-veg products
instead of veg due to which they are very strict while making the purchase of chicken, beef and
many other products (McDonald's, 2018). The culture of Malaysia is one of the major reason due
to which the company brought the changes in menu and products along with this while the
purchase of ingredients also they ensure that they implement the same culture.

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Technological factors
This factor includes the influence on industry or company with the advancement and growth of
technology within the country. Malaysia is becoming more and more technology-oriented and
the presences of companies are increasing due to effective use of social media. McDonald’s
Malaysia has its websites, strong Facebook network, presence on social media and effective
online promotion which is possible with the effective use of social media. Though, the
competitors of the company are giving tough challenges to McDonald's in Malaysia market in
terms of the delivery service (Vrontis & Pavlou, 2008). The company is not able to extend the
reach of delivery of products till Kuala Lumpur areas. This shows that the company should adopt
technology use which will help them in enhancing sales, revenue and accessibility in Malaysia.
Legal factors
The legal factors include the rules and regulations related to the operations that are must to be
followed by companies within the market. In Malaysia market, McDonald’s ensure that they are
meeting the obligations and following the rules and regulations. The company follow the
minimum wage obligation and also provide less working hours shit to students. In addition, the
company is bound by the Syariat law which states all the food served to the customers in non-
veg must be Halal. This shows that they follow the laws and regulations present within the
country.
Environmental factors
The environment is considered as one of the most important element in the society where they
are performing the operations. The company's consumption of the beef, chicken and other
products are increasing due to which they are in critics in the market of Malaysia. Though, the

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company is able to its corporate social responsibility (Yek, 2014). The company ensure that they
conduct their business in terms of honesty, fairness and integrity. Along with this, the company
ensure that they support the sustainability of the business.
Porter’s five forces
Porter's five forces framework include the analysis of industry where the company operates its
business (Hollensen, 2015). McDonald’s Malaysia applies this tool which helps them in the
analysis the competitive present within the industry and how this competitiveness affects the
working of the company.
(Source: Dudovskiy, 2016)
Bargaining power of
suppliers- Moderate
The suppliers of the company play a vital role in the company.
McDonald's company is highly dependent on the quality of
ingredients that are offered by the suppliers. The company has a
numerous number of suppliers due to which they can face the rise in
price or decrease in quality of products. In the market of Malaysia,

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McDonald’s face moderate bargaining power of suppliers.
Bargaining power of
buyers – Low
The buyers in the market of Malaysia play a vital role in shaping the
demand and price of products. The buyers of McDonald’s maintain a
high bargaining power because this is the way through which they
can try to reduce the substitute cost of customers (Ziaie, Mohamed,
Ratnasingam, Noor, & Saleh, 2012). In addition, the company can’t
keep the high prices for their products as they want to make the
product affordable for the customers.
The threat of substitute
of products- High
The threat of substitute products is high for McDonald’s in Malaysia
because the competitors are offering their products in different outlets
which might make the customer substitute. Moreover, these outlets of
competitors are open 24 hours which allow the customer to substitute
products offered by McDonald's (McDonald's, 2018).
The threat of new
entrants- Moderate
In the Malaysia market, the threat of new entrants is moderate
because it needs sufficient amount of capital for expansion. Though,
on the other side, the fast food industry is booming due to which new
competitors are planning to enter the market with product
diversification. This is the reason McDonald’s face the competition
from new entrant Carl’s Junior and Wendy’s which are still
considered as new in the market of Malaysia (Downie, 2018).
Rivalry among the
existing firms- High
The rivalry among the competitors is high within the market because
there are other companies who offer fast food at the similar price with
the best service. The competitors of the company include KFC and

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A&W that are currently present in the market of Malaysia. KFC is a
major competitor of the company as it is extending its range of
products which include fried chickens to burgers with snacks like
potato wedges and salad (Downie, 2018).
Segmentation, targeting and positioning
Market segmentation
Marketing segmentation is the process in which the company divides the market into the
potential customers among the various groups and segment (Wilson and Gilligan, 2012).
McDonald’s company segment the customer in Malaysia market which helps them in identifying
the customers to whom they can serve their products. The segments which are done by the
company are given below: -
Demographic segmentation: - This segmentation is done on the basis of age, income,
occupation and other. McDonald’s company targets children, youth and working adults at the
age of Below 13 years, 13-24 years and over 24 years with the middle and higher income group.
The occupation of the customer includes students, self-employed, full-timers and professional
people (McDonald's, 2018).
Geographic segmentation: - This market segment includes the segmentation on the basis of
region or locality. In the Malaysia market, the company segment capital and regional cities with
this they open their most of outlets in the inner city.