RESEARCH PAPER

THE MARKETING STRATEGY OF MCDONALD’S CORPORATION

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INTRODUCTION

A good marketing strategy is very important when one is
starting a business. A good marketing strategy helps an organization establish
its brand or image, which is the most important thing in attracting more
customers. In particular, it helps to identify an organization’s target markets
and to determine the most efficient ways of reaching potential customers such
as setting the right prices for products and services.  It also provides a business with focus and
direction by identifying the best opportunities and protecting against threats
in order to set future goals and to be profitable. Furthermore, it identifies
the tools that the company can effectively use to fight competition and gain
market share. In other words, it differentiates a company from competition by
identifying its distinctive advantages. Thus, understanding how to build an
effective marketing strategy will assist a business make better decisions to
maximize profits.

McDonald’s Corporation, which is one of the world’s largest
fast food chains in the world, entered the Vietnam market in 2014. Its
popularity in Vietnam is comparable to other fast food chains, although other
franchises entered Vietnam before McDonalds. For example, KFC first entered the
Vietnam market in 1997 and Burger King entered Vietnam in 2011. To understand
the effectiveness in marketing strategies used by McDonald’s, this research
will analyze its marketing strategies including SWOT analysis and the marketing
mix, which are applied globally. However, depending on certain cultures, its
marketing strategies will be adjusted to adapt to those cultures but still
based on these global marketing tactics.

I. SWOT Analysis McDonald’s Corporation

S.W.O.T is an abbreviation for Strengths, Weaknesses,
Opportunities, and Threats. Strengths and weaknesses are internal elements such
as reputation and policies of an organization, while opportunities and threats
are its external elements such as competitors and price. Nowadays, there are
more and more business owners using SWOT analysis to help move their businesses
forward by taking advantage of their strengths, improving weaknesses, capturing
opportunities, and preventing threats. Business owners not only perform a SWOT
analysis for their companies, but also use it to analyze their competitors’ businesses
because they believe that looking at their competitors’ SWOT analysis will help
them rise above their competitors.

McDonald’s is one of the world’s largest fast food franchises
which has outlets in 119 different countries serving over 68 million customers
a day. In order to further this success as well as continuing to expand their
outlets in more countries, McDonalds’ SWOT analysis is taken every year to
assess its fast food chains to make improvements.

McDonald’s first strength is a strong global brand. Most
people in America and many people from all around the world immediately recognize
the company’s golden arches. The reason for this is because of its consistency
in its food and menu in most countries. For example, the taste of chicken
nuggets and hamburgers in Reno is the same as that in Vietnam. In addition, McDonald’s
focuses intensely on training managers. The company created a program called
Hamburger University in order to train managers to be professional in
operational procedures, service, food quality, and hygiene standards.

McDonald’s believes that highly effective managers can help develop a company.

Like other fast food chains, McDonald’s weaknesses include an
unhealthy menu and a high rate of turnover. McDonald’s has been criticized in
some countries for promoting unhealthy eating habits. Consequently, it has lost
a number of customers who are afraid of gaining weight. Besides that, its
annual employee turnover rate is quite high. More than half of the positions at
McDonald’s do not require high skills. Many employees work at McDonald’s for
only a short period of time. Thus, they do not take their jobs seriously. As a
result, their employees are constantly replaced. This leads to high training
costs for the company.

Opportunities for a company or organization to grow can
always be found.  However, not every
business can perceive and capture the growth opportunities in this competitive
society. One opportunity is the growth in the popularity of organic products.  McDonald’s can diversify their product choices
as well as expand their menu by adding low calorie alternatives and organic
vegetables. Attracting customers looking for a healthier diet would be a good
opportunity for McDonald’s to take advantage of.  Another opportunity for McDonald’s is
recognizing that McDonalds does not have many outlets in some Asian countries.

People around the world these days are much busier with work and school.  People who do not have time for home cooked
meals like laborers, drivers, and students often eat out at fast food
restaurants.  Therefore, this is a good
opportunity for McDonald’s to open more outlets in these countries in order to
raise its market share.

Besides opportunities, McDonald’s faces significant threats
regarding its competition. It not only fights over regional and local
restaurants of fast food restaurants, but also international ones. Other fast
food chains mostly compete with McDonald’s over price, service, and products.

For example, Burger King and In-N-Out Burger mainly compete with McDonald’s on
hamburger category. Furthermore, with the increase in organic products such as
fresh fruit and vegetables, many consumers might not want to buy food at
McDonald’s because they are suspicious of their food quality.

II. The Marketing Mix of McDonald’s Corporation

         Beside SWOT analysis, marketing mix is also an important
tool. According to Leigh Richards, “The marketing mix is a critical component
in the development of marketing plans and strategy. The marketing mix
encompasses all of the elements that impact an organization’s ability to
successfully take its products and services to market – product, price, place,
promotion.” McDonald has used the marketing mix to reach its target customers globally.

         Product is the most crucial element of the marketing mix. If
a company can build the product that satisfies its customers’ needs, that
company is more likely to be successful in that market. Understanding the
changes in customers’ requirements, McDonalds has provided a variety of options
and introduced new products periodically. Its primary products include burgers,
fries, chicken, sandwiches, snacks, sides, desserts, shakes, salads, and
drinks. Moreover, depending on each country, McDonalds designs a special menu
to suit each country’s consumer preferences. For instance, most consumers in
India are vegetarian, so India McDonaldss has provided a wide range of
vegetarian products. By doing this, McDonalds can maintain or further their
position in the fast food market.

         The price is also a very important component in determining
a company’s profit and survival. Understanding this, McDonalds’ pricing
strategy is offering a competitive price for its customers. However, prices
vary slightly among different McDonald’s outlets due to the influence of some
factors. For example, the labor cost and the price of raw materials used to
make food differs from one country to the next. For instance, in the United
States, 10 pieces of chicken nuggets cost $4.49, whereas they only cost $3 in
Vietnam. Despite the variation of price in the different countries, McDonald’s still
tries to set a price that fits in its local markets.

         Place is a third crucial element of the marketing mix. It
refers not only to physical locations or distribution points for products, but
also to the distribution strategy. For fast food restaurants, choosing a
location that can catch people’s eyes and gives easy access to customers is highly
essential. McDonald’s has outlets which are located in shopping centers,
airports, on the corners of busy streets, and other highly visible areas.

Besides that, McDonalds has different distribution strategies in different
countries. It offers home delivery in some countries such as the Philippines,
China, Singapore, and India. Moreover, it has a drive-through option and is
open 24 hours a day, which give customers more convenient access to their
products.

         Last but not least, promotion is also a key component of the
marketing mix. It helps increase brand awareness and recognition.  There are several types of promotion such as advertising,
word of mouth, public relations, and sales promotions. McDonald’s has used different
methods of advertising and public relations. For instance, the company has
advertised its image via television, newspapers, magazines, online media, and
posters. Also, McDonald’s has used sales promotion in attracting more
customers. For example, one of the major target groups of McDonald’s is
children. Therefore, McDonald’s provides free toys in their happy meals to
create a brand loyalty when customers are at an early age. McDonalds has
maintained these types of promotion for years with the aim of boosting customer
buying frequency and competing against its competitors.

CONCLUSION

The
usefulness and importance of a marketing strategy can be seen clearly through
McDonald’s franchises. In order to be one of the world’s largest franchise
networks, McDonald’s has developed marketing strategies for each country that
it has expanded. By doing that, the company can develop business plans that
adapt to each country’s culture and preferences. Through a marketing mix,
McDonald’s can learn what products, price, promotion strategies, and
distribution places are the most preferable to local people. Also, through SWOT
analysis, the company can take advantage of its strengths, improve its
weaknesses, recognize opportunities and threats in each country that it is
franchising so as to develop an effective business plan and use efficient
strategies to compete against local businesses and other franchising networks.

A strong marketing strategy is very crucial to the success and survival of any
company. McDonald’s is a very good example of this.

 

 

 

 

REFERENCES

Marketing mix. (2017, November 29). Retrieved December 10, 2017,
from the Wiki: https://en.wikipedia.org/wiki/Marketing_mix

 

Richards, L. (2017, September 26). What Is the Importance of the Marketing Mix in the Development of a
Marketing Strategy & Tactics? Retrieved from
https://bizfluent.com/info-8132703-importance-development-marketing-strategy-tactics.html

 

SWOT analysis. (2017, December 07). Retrieved December 10, 2017,
from the Wiki: https://en.wikipedia.org/wiki/SWOT_analysis

 

 

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