Marketing of McDonalds Essay Example

issues. In 1991, the company faced a lawsuit from two environmental activists who accused them of damaging rainforests through deforestation caused by cattle grazing. Despite winning the case, McDonald's reputation was still impacted. The company also faced a successful lawsuit from a woman who suffered burns from spilled coffee. Furthermore, their marketing department experienced challenges such as temporarily suspending a "2 for 1" deal on Big Macs in January 1999 due to high demand. Competitors like Burger King, Kentucky Fried Chicken (KFC), and Wimpy are among McDonald's main rivals within the fast food industry.

To assess the effectiveness of McDonald's advertising, I will gather feedback from the general public on their promotions and visit frequency. I will also obtain information from their website and by contacting them directly. Analyzing the 4 ‘P’s of marketing - product, promotion, pricing, and place - will be my starting point to investigate how these factors have influenced McDonald's marketing strategies. The products offered by McDonald's like burgers, chips, and drinks play a crucial role in driving sales while mitigating risks associated with potential product failures.

The concept of product differentiation refers to the process of creating goods tailored for particular markets. McDonald's, as an example, utilizes this strategy by offering both the Big Mac and Chicken McSandwich to attract customers with different preferences. This approach enables McDonald's to enhance its sales by catering to a wider range of consumer demands. Furthermore, companies aim to distinguish their products from those of rivals in order to maximize profits.

In order to increase sales, businesses can use various tactics to make their products stand out. One such example is McDonald's, which employs the

following strategies:

• Design and formulation: By varying the design and formulation of similar products, such as with the Big Mac and Quarter Pounder beefburgers that each have unique sauces and ingredients, a business can differentiate its offerings.
• Name: The name of a product has a significant impact on marketing success because it can enhance sales by being memorable and catchy. Short names that convey positive associations about the product are particularly effective in this regard.

The effectiveness of branding is exemplified by the Big Mac, a product with widespread recognition and legal protection. This is due to its memorable name that includes the word "Big" and conveys high quality. McDonald's also prioritizes safe and convenient packaging for their products using foam containers for burgers and cardboard for fries, in contrast to competitors who use paper wrapping and bags. Communication with customers through marketing and promotion is essential in raising awareness of both products and brand.

McDonald's has effectively ensured maximum exposure to potential customers through various advertising channels including television, radio, newspapers, magazines, posters, sponsorship of major events like the World Cup and even the Internet. To market their products, big companies often use logos or popular personalities in their advertisements. McDonald's uses its renowned "golden arches" logo and beloved clown character Ronald McDonald. Additionally, they employ slogans to promote new products or attract new customers such as "There's nothing quite like a McDonald's".

McDonald's has increased its market awareness by sponsoring high-profile events, including the Football World Cup and the Olympic Games. Additionally, they sponsor local competitions and promote special offers like Monopoly money and World Cup scratchcards for customers who purchase their products. With a focus on maintaining

a positive public image, McDonald's supports various charities, including the Ronald McDonald foundation for Sick Children.

In addition to pleasing environmentalists by eliminating "non-eco" CFCs from its burger packaging, McDonald's utilizes various types of advertising. These include informative advertising, which is simple and straightforward, and can be seen on signs promoting the location of restaurants in public areas. They also use combative advertising to try and persuade people to change their brand preferences.

McDonald's has effectively marketed their burgers by showcasing their affordable prices and disclosing the ingredients. Their advertisements are persuasive and are geared towards motivating customers to visit the restaurants. Additionally, McDonald's has implemented several promotional strategies such as tie-ins with the World Cup and Monopoly money to attract more visitors. Price is a crucial aspect of revenue maximization, hence businesses must put careful consideration into their pricing strategies.

A business must be careful not to set their prices too high, as consumers may choose cheaper alternatives, but also not too low, as this may give the impression of lower quality. To attract customers, various pricing strategies, like discounts and sales, can be implemented. One approach is to offer special promotions that lower prices or provide incentives. McDonald's has used this method with their "2 for 1" offer on the Big Mac and with limited-time novelty burgers like the McTriple.

Various tactics are employed to price products, such as penetration pricing, initially offering them at a low cost and lowering the price over time. Another approach is the "loss leader" technique, where one item is sold at a significant loss to increase consumer awareness and promote the sales of other products. For instance, McDonald's has introduced hamburgers

priced at just 59p using this tactic. The location of a product's sale is also crucial for successful marketing.

To sell a product successfully, it must be placed in areas where it will be in demand. McDonald's has recognized this by strategically placing its restaurants in locations such as airports and stations, catering to individuals seeking a quick bite. Additionally, the introduction of "drive-thru" restaurants situated near main roads allows for efficient service to car drivers. As a result of the low cost and high volume of McDonald's products, they are initially supplied to the restaurants in bulk before being sold to the customers. This approach is more practical than having the customer order directly from the main company.

The effectiveness of McDonald's advertising can only be determined through the collection of public opinion via questionnaire, despite the possible usefulness of company information. To gather this information, options such as interviewing and telephoning are available, but due to practicality and cost, questionnaire is deemed as the most appropriate approach.

Questionnaires have various limitations. Closed questions may not provide a comprehensive understanding of the respondent's feelings, while open questions may lead to infinite possible responses, making data analysis difficult. Furthermore, respondents may falsify certain information and questionnaires may not give a complete picture of the individual's emotions. Random and stratified sampling are two main methods for data collection. Random sampling is used to obtain a representative sample of the population, thus leading to justifiable conclusions. Despite potential variations in gender or age groups, the results should not be significantly affected. Supplementary financial information from McDonald's will be analyzed to evaluate their current financial status

and the effectiveness of their marketing strategies.

The section discusses a questionnaire and the reasoning behind its questions. The first two questions inquire about respondent gender and age, providing personal information to match against their responses. The third question asks about the frequency of fast food purchases, reflecting attitudes towards it and how they may vary by age. Question four asks why those who rarely or never purchase fast food avoid it, giving insight into areas McDonald's needs to improve. Finally, question five asks which fast food restaurants respondents frequent the most, indicating which ones are the most successful.

Question 6: Do you know these McDonald's products?Selections: Big Mac, McSandwich, McNuggets, Quarter-Pounder, Arch Deluxe, Happy Meal, McShake, Extra Value Meal. This query aims to determine the level of McDonald's brand recognition to assess the success in promoting their products.
Question 7: Where have you encountered McDonald's advertisements?Selections: Newspapers, Magazines, Radio, Internet, Posters, Television, McDonald's sponsorship. This investigation will demonstrate the impact of McDonald's advertising and how successful it has been in reaching the general public.
Question 8: How much has McDonald's advertising influenced you?Selections: A great deal, quite a lot, not much, hardly any, none at all. This inquiry will reveal the extent of McDonald's ability to affect and influence their consumers' purchasing decisions.
Question 9: Have McDonald's promotions influenced your decision to buy their products?Selections: More likely, no effect, less likely. This question examines the effectiveness of McDonald's marketing strategies that involve special deals and offers to determine its success rate.
Question 10: If you regularly visit McDonald's, what is your opinion on their prices?Very expensive, expensive, just right, cheap, very cheap. This query aims to evaluate if McDonald's prices

are suitable by measuring customer satisfaction with it.Question 11 seeks to understand the reasons why individuals who frequently consume fast food do not choose McDonald's as their top preference, as identified in Q5. The question aims to uncover the factors that discourage them from purchasing products from this particular outlet.

The aim of the survey is to determine if McDonald's has a favorable public image. Respondents have the option to select Yes, No or Not sure in order to evaluate how they perceive McDonald's and its advertising campaigns. The surveys were randomly distributed from February 4th to February 11th in 1999 without targeting specific McDonald's restaurants, resulting in unbiased results. As stated on the company's website (1997 Annual Report), McDonald's advertises heavily across various mediums including television, radio, posters, newspapers and magazines with multiple "impacts" intended to increase market share. Some slogans like "There's nothing quite like a McDonald's" are now synonymous with the brand.

McDonald's has utilized various strategies to increase customer base by placing numerous signs and directions in stations and streets. The brand's popular clown character, Ronald McDonald, created in the 1960s, along with its renowned "golden arches" logo, have been used to heighten brand awareness. Additionally, the "Happy Family" of Grimace, Officer Big Mac, and their companions promote McDonald's Happy Meal selection. Sponsorship of significant sporting events, including the Olympics and Football World Cup, as well as involvement in significant charitable causes demonstrate McDonald's reputation and visibility.

McDonald's focuses on increasing brand awareness and attracting new young staff. Survey and account sheet data reveal interesting figures and general trends about the company. These findings can guide recommendations through careful analysis. The McDonald's balance sheet

demonstrates the company's healthy state, with profits before tax increasing from $1,572m in 1996 to $1643m in 1997. This suggests effective product marketing. Advertising is a top priority for McDonald's, spending $1450m in 1997, resulting in extensive advertisements.

The results of the survey were fascinating, specifically in regards to the frequency of fast food consumption. Of all the participants, 24 males reported buying fast food frequently or very frequently, while only 14 females answered similarly. Additionally, 27 respondents between the ages of 0 and 30 confirmed their frequent purchase of fast food, but only 8 individuals over the age of 30 did so.

The findings suggest that females tend to prioritize their weight and appearance, leading them to avoid fast food that is often considered unhealthy. In contrast, males are less concerned about these factors and tend to consume more junk food. Furthermore, younger individuals prefer fast food due to its recent emergence while older people are less inclined to eat it since they didn't grow up with it. The survey discovered that most of those who opposed fast foods (28 out of 34 responses) did so because of taste or health concerns. This highlights McDonald's main issue with non-regular customers being a dislike for its core products.

Out of 28 people who frequently consume fast food, a dislike for McDonald's taste was cited by 20 respondents. Nevertheless, Question 5 indicated that McDonald's holds the biggest market share at 58%, implying that their advertising tactics have been successful in luring more customers to their establishments. Nonetheless, this could also be attributed to McDonald's having a greater number of locations compared to other rivals like Burger King.

The findings

from Question 6 demonstrate that McDonald's has achieved impressive brand recognition. Nearly all participants (98%) were familiar with the Big Mac, while approximately 75% were aware of other products offered by McDonald's. However, the Arch Deluxe had low levels of recognition among respondents. Overall, McDonald's has effectively promoted its products and benefited from the extensive advertising campaigns to attract customers. Question 7 further supports this observation, revealing that advertising for McDonald's is ubiquitous across various mass media. The broad reach of McDonald's advertising efforts has enabled the company to make a significant impact on consumers.

The success of McDonald's advertising was confirmed by both Question 8 and Question 9. In Question 8, almost 50% of the respondents confessed that McDonald's advertising had significantly impacted their decision, indicating the effectiveness of their marketing efforts. Additionally, in Question 9, 25% of the respondents agreed that McDonald's promotions had increased the likelihood of them purchasing their products, highlighting their usefulness. Furthermore, 45% of the respondents believed that McDonald's pricing was appropriate, while only 5% felt it was very expensive. This indicates that McDonald's has effectively strategized its pricing.

Although McDonald's only has a favorable public image among half of the population, the survey results reveal that the company has effectively marketed its products. The study also demonstrates that taste and health concerns are the main reasons why people avoid McDonald's, especially females in older age groups who are less likely to purchase burgers and chips. To boost sales, McDonald's should concentrate on this demographic by offering healthier options like low-fat burgers and chips that appeal to health-conscious females.

McDonald's can tackle its loss of customers by launching products

that cater to older generations, including traditional foods, while also increasing its consumer base through the introduction of new and diverse products that appeal to those who dislike their current offerings. This would result in a revenue boost. To improve their unfavorable public image revealed in a survey, McDonald's should pursue environmentally friendly initiatives such as supporting rainforest re-growth rather than just refraining from grazing in those areas. Furthermore, they could enhance customer service and donate more to charity given their high profits.

Although the research yielded logical results, there is still potential for improvement, particularly with regards to the sample size. While utilizing 100 participants is a considerable number for this survey type, it may not be adequate enough to establish a conclusive mandate as they may not accurately represent the entire population.

It is recommended to increase the number of surveys sent out to approximately 500 to arrive at a more solid and justified conclusion. Besides, an uneven distribution in the personal information of the respondents might have led to bias. Creating equal groups based on age and gender (for instance, 10 males aged 0-10, 10 males aged 11-20, etc.) would have made the finding more "stratified." Moreover, using a survey limited the ability to ask for more structured or detailed information. Additionally, there were concerns with the responses received which potentially impacted the proportionality of the answers.

One of the questions in the survey asked where McDonald's advertisements were seen and one possible answer was "Internet". 12 people claimed to have seen them online. But it should be noted that this result may not be reliable as it assumes that all survey respondents had

access to the internet, which is unlikely since only 7% of UK households are connected.

Although the research conducted was of good standard and justifiable for reaching a conclusion, there were contradictions found in the results that caused doubt. One such contradiction was that although people avoided McDonald's due to the taste of the food, they were unaware of a healthier option, the Arch Deluxe. Furthermore, 60% of people claimed to use McDonald's most often, but only half thought it had a positive public image. To improve the research, sampling more people in a detailed and stratified manner, and carefully considering the questions asked could prove beneficial.