BUMN097H5 Unit 01: Sustainable Marketing Report on McDonald's

This report provides a comprehensive analysis of sustainable marketing challenges faced by organizations in the 21st century, with a specific focus on McDonald's. It examines the challenges of integrating sustainable practices into marketing strategies, considering factors such as consumer awareness, supply chain management, and stakeholder expectations. The report evaluates McDonald's stakeholder relationships, including employees, customers, and investors, and assesses the impact of consumerism on the company's ability to deliver value over time. It explores how changing consumer preferences, concerns about health and environmental impact, and global market dynamics have influenced McDonald's marketing strategies and overall performance. The report highlights McDonald's initiatives towards sustainability, such as menu diversification and sustainable sourcing, while also acknowledging the criticisms and challenges the company faces in meeting consumer demands and maintaining profitability. The analysis provides insights into the complexities of sustainable marketing and its implications for businesses operating in a dynamic and evolving market landscape.

Running head: SUSTAINABLE MARKETING
Sustainable Marketing
[McDonald’s]
Name of the student:
Name of the university:
Author note:

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Executive Summary
The report aimed to identify the challenges faced by contemporary organizations about
sustainable marketing. As found in the study, sustainable marketing will require striking a
balance between benefits delivered to the stakeholders, and avoiding restrictions to occur on part
of liquidity and diversification for a firm. McDonald’s as found in the study now struggles in
terms of delivering value to its customers and shareholders. McDonald’s scuffles to satisfy its
customer needs in the US, Latin America and Japan due to the increasing demand for regional
foods. The fall in revenue is creating a challenge for McDonald's to keep its investors satisfied
with their returns.

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Table of Contents
INTRODUCTION...........................................................................................................................3
BODY..............................................................................................................................................3
The Challenge of Sustainability for Marketing in 21st Century Organisations..........................3
Appraising Stakeholder Relationships for McDonald’s..............................................................6
How consumerism has been impacting its ability to delivering widespread value over time?...7
Consumerism in the context of McDonald’s...........................................................................8
CONCLUSION and RECOMMENDATION.................................................................................9
REFERENCES..............................................................................................................................11

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INTRODUCTION
Sustainable marketing is dealing with practices that focus on investing in social and
environmental related marketing strategy. Sustainable marketing is done to make consumers
realize that they and their coming generations are important. There exist a noticeable relationship
between sustainable marketing and its stakeholders as they get impacted by practices adopted to
facilitate the process (Katrandjiev 2016). The report investigates the challenges of sustainable
marketing for 21st-century organizations. It identifies the contextual involvement of stakeholders
in the McDonald’s approach to sustainable marketing. Moreover, the impact of consumerism on
the McDonald’s ability to deliver the value will also be discussed.
BODY
The section discusses the challenges faced by 21st-century organizations for practicing
sustainable marketing. The discussion should help to figure out what best can be done to manage
it effectively. The section progresses with a description of how McDonald’s stakeholders are
involved in its sustainable marketing practices. This description should help identify the extent to
which its stakeholders influence its marketing practices. It also assesses the impact of
consumerism on McDonald’s ability to deliver value to its stakeholders over time.
The Challenge of Sustainability for Marketing in 21st Century Organisations
Sustainable marketing can be considered as an art of handling criticism for the negative
societal and environmental impact of a business, and management of strategies to be applied to

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the production process and the kind of products to be produced. Businesses irrespective of their
nature and operating scale affect the environment and society. This was considered a problem in
times when people had limited resources to access the latest worldwide news. Now, with so
many people using smartphones and going on the internet on their PCS or tablets, the ease of
accessing news articles has improved excellently. Within just a few seconds of news happening
around the globe can be accessed (Tynan, McKechnie and Heath 2017).
This revolution in the media communication industry as stated above has done huge
damage to worldwide businesses (Ghotbifar, Marjani and Ramazani 2017). The way businesses
produce a product and affect the environment is not hidden much from educated people. The
growing awareness of the damaging side of a business has affected their decision-making as
well. The preference to buy healthier and safer products have increased. It is due to this tendency
of the people there is growing competition amongst companies for attracting new customers and
retaining those existing. They all are trying to offer the best quality product at the most
affordable rate.
There is very little awareness of how to apply sustainable principles to the actual
practice. A sustainable practice would mean using only sustainable raw materials and a
sustainable way of producing goods. However, there will be problems at the various levels of
the production process. First, there would be no clear guidelines to look for a completely
different set of suppliers for receiving sustainable supplies or work with the existing as well as
new suppliers. It should never be feasible to close the deal with the existing and start working
with the new suppliers as this should affect the efficiency of the flow of materials. Going the
other way that is to work with those existing as well as new suppliers would mean living in a

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dual situation. There will be a focus on gaining profits as well as create a good corporate image
(Hurth and Whittlesea 2017).
Another challenge would be to let consumers believe in the change brought in the
names of sustainable marketing. One way to show the difference can be demonstrating the
difference in the use of ingredients. More use of sustainable ingredients would mean that the
product is good from the health perspective. Moreover, showing consumers the source of
materials would be an additional boost to their confidence in the brand.
Contemporary organizations are under enormous pressure to fulfill their social
environmental responsibilities. Their social responsibilities can be to promote workplace
diversity, facilitate fair labor practices, support volunteer efforts, etc. Their environmental
responsibility would be to use natural resources efficiently and effectively to reduce their adverse
environmental impacts as well as the financial costs of the production (de Sá et al. 2019).
Violation of the labor code of conduct, for example, would not just encourage rebellion attitude
in employees but also do the negative publicity of the brand. Few fast-fashion companies
recently being criticized for their unethical practices in production such as forced labors to work
under unsafe working conditions (de Sá et al. 2019).
Sustainable marketing boosts the level of competition between companies existing in
the industry. They will compete for producing the best quality product at the most competitive
prices. The one with better innovation and knowing how to execute it actually should have the
advantage of the market opportunity. The essence of success in this regard would be to show
more use of innovation to bring in more new products.

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It is always challenging to influence the buying behavior of consumers. Those who
have become habituated of using rich in chemical products, they will seldom quit these products
for their sustainable alternatives. It is because they have found these products useful for their
diverse needs. It would be challenging to let them believe that a sustainable alternative would be
equally good or even better than the one they have used on a regular basis (Kumar and
Venkatasubbaiah 2017). According to Unilever, sustainability marketing is their biggest
challenge. They have been challenged tremendously for letting consumers go for more
sustainable behaviors (Marketingweek.com 2020).
Appraising Stakeholder Relationships for McDonald’s
McDonald’s gives noticeable importance to its stakeholders. Their sustainability policy
and programs are aimed at the best interest of most of its stakeholders. McDonald’s stakeholders
are employees, customers, investors and communities.
Employees: McDonald’s gives its employees the highest preference. It ensures that
employees have regular and good support for their compensation benefits as well as career
development programs. Employees get effective training on different skills set. McDonald's has
its training facility at Hamburger University. However, the pay system is not very attractive as
employees are paid low wages (Mcdonalds.com 2020). Therefore, McDonald’s does partially
meet its employees' interest in the company.
Customers: They are given the second-highest priority. Customers perceive that they
will get healthier foods at affordable prices. Products are made to follow a standardized strategy
and sell through a streamlined network of the supply chain. This helps McDonald’s meet its

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customer’s interest in receiving affordable products. However, the foods found at McDonald's
are less healthier (Mcdonalds.com 2020). Therefore, McDonald's does partially satisfy its
customers' interest in the brand.
Investors: McDonald's gives its stakeholders significant importance. The interest of its
investors is profitability and growing revenues. The revenue has grown at 3.6% for the company
every single year (Macrotrends.net 2020). The use of services in recent times has helped the
company much. The company is moving successfully with its aim to source 100% cage-free
eggs. A commitment to source 100% of its coffee from sustainable sources, increasing the use of
recyclable cups, etc. are its some notable achievements (Mcdonalds.com 2020). These
achievements have helped to satisfy the interest of the investors effectively.
How consumerism has been impacting its ability to delivering widespread
value over time?
According to Gabriel and Lang (2015), consumerism is an act to encourage a buy and
boost sales. The commentators of ‘Consumerism’ say that it increases the consumption level.
Consumers have the freedom to select the product of their choice and from their chosen brand.
Those who lament it, they consider ‘Consumerism’ to be the final stage of ‘Commodification’.
The critics say that consumerism exploits and uses people for the sake of economic benefits
attached to a business. However, Papaoikonomou, Cascon-Pereira and Ryan (2016) disagree
with the critics of consumerism by saying that it is not an act to force consumers to buy
something but to give them leverage to choose from the wider product options. Consumers

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nowadays are broadly defined as ethical consumers. They make decisions based on their social,
environmental and political concerns.
Consumerism in the context of McDonald’s
When McDonald’s became popular with its product line, the company was criticized
for selling foods that are unhealthy. The critics claimed that McDonald’s along with other fast-
food chains were responsible for increasing obesity in people. It did not just affect the health of
people but also burdened the healthcare system with a complex disease to fight with.
McDonald’s faced negative publicity for selling unhealthy foods that affected their sales
significantly. McDonald’s was also criticized for its sizeable environmental footprint. Wasteful
packaging, solid waste and inefficient use of energy in stores were some of its environmental
issues (Mazidi and Speakman 2017).
McDonald’s today has better practices in place to cope up with these challenges like the
company has diversified its food menu with the inclusion of salads, grilled chicken, fruits, low-
fat milk and other healthy foods in it. McDonald's works with hundreds of suppliers in Canada
for ensuring the supplies of sustainable food ingredients. Besides, there is an environmental
scorecard for assessing the performance of suppliers in areas such as water use, solid waste
management and energy use (Kraak 2018).
McDonald’s has done adjustment to its right to introduce any product that has proved
to benefit the company in the past. The adjustment can be seen in healthier foods such as those
offered at McDonald’s followed by the hazardous impact of its food on the health of people.

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However, the right to charge any price for a product was being troubled from many problems
such as those listed below (Ft.com 2020):
 Left behind in the US for shifts in dining habits Food safety concerns have weakened the brand in China Legal disputes in India have affected its early advantage in the country Consumer backlash in Japan against McDonald’s cost cuts strategy The criticism being faced for not meeting the health safety standards of Russia Demand for local foods have affected its revenue in Latin America
The issues highlighted as bullet points reveal that McDonald’s now faces many barriers to
deliver widespread value over time. Consumers in different parts of the world such as in Japan,
Latin America and the United States now find more value in regional foods and foods offered by
different fast-food chains. The revenue as revealed in the bullets has fallen for its operations in
Latin America. Falling revenues will be a concern for its investors. The decreasing revenue will
affect McDonald’s ability to pay off debts. This may affect the company's credit score and thus
will harm the creditors (Anwaar 2016).
CONCLUSION and RECOMMENDATION
Therefore, sustainable marketing is not an easy task to conduct. The task reveals that
there will be many challenges concerning practices for marketing in 21st-century organizations.
The challenge will be to meet the changing consumption pattern and remain the most dominant

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player. The challenge will be to ensure that the stakeholders of a firm are always at the benefit.
Sometimes employees, one of the stakeholders of a company, have to face the consequences of
falling business profits. There can be attrition of people or a reduction in the returns to be paid to
investors. Customers might find other brands as most suitable for their food needs.
Hence, It is recommended that McDonald’s should not go for managing earnings by
opting for a ‘jobs layoff’. Other ways can be used to remain a significant player in the market.
jobs layoff may result in negative publicity of the firm.
Instead, strategic decisions at the expense of short-term earnings will be recommended.
McDonald’s should ‘Act Local’ by responding faster to changing market needs. Their responses
to problems in the US, Latin America, Japan, China and other countries have been slow.
McDonald's needs to learn how to get rid of assets that do not create value for the
company. They should do this whether it is related to its people or the food menu.
When the opportunity to invest in the business has fallen down, McDonald's should
return cash to its shareholders. Besides, CEOs and senior executives should be rewarded for
their remarkable association with the company.
Frontline managers and middle managers should also be rewarded for their superior
performance. They will feel being valued.
On top of all, McDonald’s will need to strike a balance between the benefits to be given
to its senior executives to keep their motivation high in ownership stakes, and the restrictions that
may result on part of their diversification and liquidity.

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