RESEARCH PAPER THE MARKETING STRATEGY OF MCDONALD’S CORPORATION INTRODUCTIONA good marketing strategy is very important when one isstarting a business. A good marketing strategy helps an organization establishits brand or image, which is the most important thing in attracting morecustomers. In particular, it helps to identify an organization’s target marketsand to determine the most efficient ways of reaching potential customers suchas setting the right prices for products and services. It also provides a business with focus anddirection by identifying the best opportunities and protecting against threatsin order to set future goals and to be profitable.
Furthermore, it identifiesthe tools that the company can effectively use to fight competition and gainmarket share. In other words, it differentiates a company from competition byidentifying its distinctive advantages. Thus, understanding how to build aneffective marketing strategy will assist a business make better decisions tomaximize profits.McDonald’s Corporation, which is one of the world’s largestfast food chains in the world, entered the Vietnam market in 2014.
Itspopularity in Vietnam is comparable to other fast food chains, although otherfranchises entered Vietnam before McDonalds. For example, KFC first entered theVietnam market in 1997 and Burger King entered Vietnam in 2011. To understandthe effectiveness in marketing strategies used by McDonald’s, this researchwill analyze its marketing strategies including SWOT analysis and the marketingmix, which are applied globally. However, depending on certain cultures, itsmarketing strategies will be adjusted to adapt to those cultures but stillbased on these global marketing tactics. I.
SWOT Analysis McDonald’s CorporationS.W.O.T is an abbreviation for Strengths, Weaknesses,Opportunities, and Threats. Strengths and weaknesses are internal elements suchas reputation and policies of an organization, while opportunities and threatsare its external elements such as competitors and price. Nowadays, there aremore and more business owners using SWOT analysis to help move their businessesforward by taking advantage of their strengths, improving weaknesses, capturingopportunities, and preventing threats.
Business owners not only perform a SWOTanalysis for their companies, but also use it to analyze their competitors’ businessesbecause they believe that looking at their competitors’ SWOT analysis will helpthem rise above their competitors. McDonald’s is one of the world’s largest fast food franchiseswhich has outlets in 119 different countries serving over 68 million customersa day. In order to further this success as well as continuing to expand theiroutlets in more countries, McDonalds’ SWOT analysis is taken every year toassess its fast food chains to make improvements. McDonald’s first strength is a strong global brand. Mostpeople in America and many people from all around the world immediately recognizethe company’s golden arches. The reason for this is because of its consistencyin its food and menu in most countries.
For example, the taste of chickennuggets and hamburgers in Reno is the same as that in Vietnam. In addition, McDonald’sfocuses intensely on training managers. The company created a program calledHamburger University in order to train managers to be professional inoperational 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 anunhealthy menu and a high rate of turnover. McDonald’s has been criticized insome countries for promoting unhealthy eating habits. Consequently, it has losta number of customers who are afraid of gaining weight.
Besides that, itsannual employee turnover rate is quite high. More than half of the positions atMcDonald’s do not require high skills. Many employees work at McDonald’s foronly a short period of time. Thus, they do not take their jobs seriously. As aresult, their employees are constantly replaced. This leads to high trainingcosts for the company.Opportunities for a company or organization to grow canalways be found.
However, not everybusiness can perceive and capture the growth opportunities in this competitivesociety. One opportunity is the growth in the popularity of organic products. McDonald’s can diversify their product choicesas well as expand their menu by adding low calorie alternatives and organicvegetables. Attracting customers looking for a healthier diet would be a goodopportunity for McDonald’s to take advantage of. Another opportunity for McDonald’s isrecognizing 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 cookedmeals like laborers, drivers, and students often eat out at fast foodrestaurants. Therefore, this is a goodopportunity for McDonald’s to open more outlets in these countries in order toraise its market share. Besides opportunities, McDonald’s faces significant threatsregarding its competition. It not only fights over regional and localrestaurants of fast food restaurants, but also international ones. Other fastfood 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 onhamburger category. Furthermore, with the increase in organic products such asfresh fruit and vegetables, many consumers might not want to buy food atMcDonald’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 importanttool. According to Leigh Richards, “The marketing mix is a critical componentin the development of marketing plans and strategy. The marketing mixencompasses all of the elements that impact an organization’s ability tosuccessfully 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. Ifa company can build the product that satisfies its customers’ needs, thatcompany is more likely to be successful in that market.
Understanding thechanges in customers’ requirements, McDonalds has provided a variety of optionsand introduced new products periodically. Its primary products include burgers,fries, chicken, sandwiches, snacks, sides, desserts, shakes, salads, anddrinks. Moreover, depending on each country, McDonalds designs a special menuto suit each country’s consumer preferences. For instance, most consumers inIndia are vegetarian, so India McDonaldss has provided a wide range ofvegetarian products. By doing this, McDonalds can maintain or further theirposition in the fast food market. The price is also a very important component in determininga company’s profit and survival. Understanding this, McDonalds’ pricingstrategy is offering a competitive price for its customers. However, pricesvary slightly among different McDonald’s outlets due to the influence of somefactors.
For example, the labor cost and the price of raw materials used tomake food differs from one country to the next. For instance, in the UnitedStates, 10 pieces of chicken nuggets cost $4.49, whereas they only cost $3 inVietnam. Despite the variation of price in the different countries, McDonald’s stilltries to set a price that fits in its local markets. Place is a third crucial element of the marketing mix. Itrefers not only to physical locations or distribution points for products, butalso to the distribution strategy. For fast food restaurants, choosing alocation that can catch people’s eyes and gives easy access to customers is highlyessential. 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 differentcountries. It offers home delivery in some countries such as the Philippines,China, Singapore, and India. Moreover, it has a drive-through option and isopen 24 hours a day, which give customers more convenient access to theirproducts. Last but not least, promotion is also a key component of themarketing 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 differentmethods of advertising and public relations. For instance, the company hasadvertised its image via television, newspapers, magazines, online media, andposters. Also, McDonald’s has used sales promotion in attracting morecustomers. For example, one of the major target groups of McDonald’s ischildren. Therefore, McDonald’s provides free toys in their happy meals tocreate a brand loyalty when customers are at an early age. McDonalds hasmaintained these types of promotion for years with the aim of boosting customerbuying frequency and competing against its competitors.CONCLUSIONTheusefulness and importance of a marketing strategy can be seen clearly throughMcDonald’s franchises.
In order to be one of the world’s largest franchisenetworks, McDonald’s has developed marketing strategies for each country thatit has expanded. By doing that, the company can develop business plans thatadapt to each country’s culture and preferences. Through a marketing mix,McDonald’s can learn what products, price, promotion strategies, anddistribution places are the most preferable to local people. Also, through SWOTanalysis, the company can take advantage of its strengths, improve itsweaknesses, recognize opportunities and threats in each country that it isfranchising so as to develop an effective business plan and use efficientstrategies to compete against local businesses and other franchising networks.A strong marketing strategy is very crucial to the success and survival of anycompany. McDonald’s is a very good example of this.
REFERENCESMarketing 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 aMarketing Strategy & Tactics? Retrieved fromhttps://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