McDonald's Place Strategies example essay topic

McDonald's has dominated the fast food industry for nearly three decades. With global sales of over $40 billion, its closest competitor, Burger King, would need over $27 billion in sales to take over the number one position in the industry. (Dailey, 2000, p. 8) The company has achieved prosperity through the application of highly successful marketing procedures first in the United States, and then globally. These procedures include (1) educating their consumers, and (2) brand consistency.

When McDonald's first opened, they served people quickly and efficiently. That's one of the things that appealed to Ray Kroc when he opened his own franchise. (McDonald's History, 2001.) People learned to expect fast service and consistent food at each McDonald's as they opened across the country. When McDonald's spread globally, they had to reeducate their consumers. Many customers were not familiar with the American menu of burgers, fries and shakes, or the concept of quick service.

(Editors, 1999, p. 1) Their first television ads in the United Kingdom showed the food, the restaurants, and stressed that McDonald's was "new and different". (Editors, 1999, p. 3) McDonald's continued this marketing strategy as they opened other worldwide restaurants, and tailored their marketing to the local population. For example, in I 996 in India, fast food was already a well-known concept. McDonald's tailored its menu to non-beef items like the Fish Sandwich, the Mc Chicken Sandwich, and the Veg e Burger with cheese. Consumers were already aware of the fast food concept, so McDonald's concentrated on building traffic. Their strategy was simple.

"Get them in. Trade them up. Get them back". (Shatrujeet, August 2000) Educating the consumer in India began with educating the fathers, who usually make the decision where to eat when the family eats out.

Marketing studies showed that fathers thought of McDonald's as a "drag on the wallet". To educate fathers on the value of McDonald's, television ads were created that showed the value of ice cream cones, and also showed McDonald's as more than just a restaurant, they treated it as a "destination". (Shatrujeet, June 2000) McDonald's encourages their owners to be innovative. It was a Canadian restaurant owner who first created the "Mc Flurry", by adding bits of candy bars to his milkshakes. McDonald's liked the idea, and adopted it system-wide.

(Venkatarman, 2000) Brand consistency has always been a number one priority with McDonald's. Their food and restaurants are as recognizable in Hong Kong as they are in Hannibal, Missouri. This total reliance on consistency is McDonald's most effective marketing strategy, and has been for decades. "The almost military planning of the company means that, from Birmingham to Beijing, if you walk into a McDonald's and order a Big Mac and fries, you know how it will taste and what the wrapping will look like". (Editors, 1999, p. 1) The company creates standards for everything from style of dress to exactly how much ice should be in each cup of soda. This strategy makes the consumer comfortable with the McDonald's brand, no matter where they are in the world.

McDonald's is the most recognizable brand in the world. Their strict attention to detail has helped vault them into this position, and helps maintain their dominance over their competitors. MARKETING MIX STRATEGY A company's marketing mix is the combination of factors employed with respect to the "Four P's" of marketing? product, price, place, and promotion. McDonald's application of the Four P's is discussed for each factor. Product Strategies As we " ve discussed, the product strategies employed by McDonald's include brand consistency and assessing location when creating a product mix. In India, beef is not served on the menu.

A lamb burger called the "Maharajah Mac" is served as the mutton version of the Big Mac. In Israel, kitchens are maintained to Kosher standards, and in Saudi Arabia they close five times per day so customers and employees can pray. (Venkatarman, 2000) "Company officials insist that their 26,000 restaurants have been uniquely shaped by the local cultures of the countries and regions in which they operate. They call this 'multilocalism'". (Venkatarman, 2000) McDonald's also responds to consumer change, and add to their product mix when consumer tastes change. When consumers began demanding "healthier" fast food, McDonald's responded with items like the "Mc Salad Shaker", and "Fruit 'n Yogurt Parfait".

(McDonalds Nutrition, 2001) This flexibility, even when blended with such strict brand consistency, gives consumers more choices, and helps keep them coming back to try new menu items. Pricing Strategies Pricing strategies since the first McDonald's opened have always been to offer competitive pricing, with good value for the customer's dollar. In many countries, prices are kept extremely low on some items to bring in customers, and keep them coming back. "So sprung the Happy Meal concept, where kids got a burger, a Coke and a toy, all for Rs 45. (Incidentally, the toy alone cost more than the meal.) The value-for-money proposition hit home. Another pull was the ice cream cone for Rs 9".

(Shatrujeet, June 2000) These strategies are employed throughout the company, and revised for each country and location. Marketing has been "de-centralized" from the corporate headquarters. Now, advertising is handled separately in each country, and is geared more specifically to each market and its consumers. Place Strategies McDonald's place strategies include global expansion and fast food dominance. "Brazil is a prime example of how McDonalds franchises operate at the community or country level.

In Brazil, McDonalds employees and suppliers are all local. The potatoes and beef cattle are raised in the Brazilian countryside". (Venkatarman, 2000) Not only does this strategy keep products fresher and readily available for delivery to the consumer, it also adds to the local economy. It's been said that distribution is a key component of a competitor or branding. McDonald's place strategies keep them number one in the fast-food market. Promotion Strategies As we " ve discussed, promotions often stress value to the consumer, and also may promote some products at a loss in order to bring in customers.

Global marketing strategies are geared to the locale, and owners are encouraged to gear their menus to local tastes, as well as the global standards of the company. In India, for example, "The new baseline - McDonald's mein hai kuch ba at - is in keeping with the 'make Mac the destination's strategy. McDonald's is not a 'food place' alone. It's an experience".

(Shatrujeet, June 2000) CONCLUSION Is all of McDonald's global marketing successful? No. Witness the famed "Mc Libel" court case in Britain in 1997. McDonald's sued two British environmentalists for leaflets they handed out, which took a negative view of the company and its products. McDonald's won the case, but lost their image in Britain.

"Almost overnight, McDonald's was being talked of in the same breath as the worst excesses of American corporate culture". (Editors, 1999, p. 4) Even with an occasional PR disaster, McDonald's is the most recognizable brand in the world, outpacing even Coca-Cola in popularity and recognition. McDonald's has created their global dominance by building a continually consistent brand, value for the consumer, and educating consumers in the nuances of fast food. "It is almost impossible to fathom what might topple McDonald's, forcing the burger behemoth to bid adieu to the No. 1 slot it has so formidably carved out". (Dailey, 2000, p. 8)

Bibliography

McDonald's Corporate - Financial Press Release 01/24/2001".
McDonald's Corporation. 24 January, 2001.
web Editors of Forbes. "McDonald's on the Forbes 500". Forbes Magazine. 2001.
web "McDonald's Corporate - History". McDonald's Corporation. 2001.
web Dailey, Patricia B. "Numbers Game". Restaurants & Institutions 15 July 2000: vs.
110, i 19, p 8. Editors. "How McDonald's Conquered the UK. ' " Marketing 18 February 1999: pps.
1-5. Shatrujeet, N. "McDonald's: Pumping up the Volumes". AgencyFaqs! 22 August 2000: web Shatrujeet, N.
McDonald's: Bringing up Father". AgencyFaqs! 1 June 2000: web Venkatarman, Bina.
McDonalds' 'Multilocalism'". The Earth Times 20 June 2000: web.