Strategic Marketing at McDonald’s - McDonalds Essay Example

Strategic Marketing at McDonald’s - Strategic Marketing at McDonald’s introduction.

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In the success-oriented company marketing serves as one of the tools of company’s strategy realization. McDonald’s has to constantly change its marketing strategy because public opinion of fast food can be radically different during different decades, and thus different products on the menu are popular at different times. With the help of primary and secondary research tools, the paper seeks to investigate and evaluate the marketing strategies which McDonald’s has used in order to target customers seeking to consume only “healthy” products and those who do not mind consuming fat foods. The paper describes consumer perceptions of “healthy” and “unhealthy” foods, critically analyzes the development of McDonald’s marketing strategy in relation to changes in public opinion and provides recommendations for further adjustments of the company’s strategy.

Introduction and relation to previous work

McDonald’s has remained the leader of the fast-food market for many years. The company currently operates 30,000 restaurants in 119 countries of the world and average annual sales of a McDonald’s restaurant have reached $1.8 million. In 2004, the company served additional 1.6 million customers in comparison with 2003. McDonald’s success might seem paradoxical to some extent, given the constantly changing attitude towards fast food.

The opinion that fast food is not healthy has been expressed by many members of the society, particularly after many nutritionists published their findings about the disadvantages of fast food. “Fast food commonly has a number of problems that were outlined in Fast Food Facts by registered dietician Marion J. Franz. A typical meal may contain half of the body’s daily caloric requirement as well as the entire daily sodium intake McDonald’s” (Goldstein 2002: 143). Even though fast-food restaurants did introduce their own interpretation of “healthy options” in order to attract customers looking for “healthy” choices, they failed to meet “healthy” standards despite all of their efforts. As research has shown, “so-called healthy options in fast food restaurants contain more salt than many burgers, it is revealed today.” (Salads in Fast-Food Chains Contain More Salt Than the Burgers. 2005:13).

University of Liverpool study has found that people in the US are mostly supporting healthy lifestyles and that the perception of overweight people in the society is negative. The researchers gave the picture of a guy standing next to a large woman to a number of respondents and the picture of the same guy standing next to a thin woman to others. The results proved that the guy was not generally considered attractive by the first group of respondents, while his rating was much higher among the respondents in the second group. The results of the investigations “indicated that just standing next to a large woman can be bad for a guy’s image.” (The Americans are more accepting of heavier bodies. Fewer people say overweight people are less attractive, survey finds. Associated Press. 4:05 p.m. ET Jan. 23, 2006. Accessed on February 22, 2006 at URL: http://www.msnbc.msn.com/id/10807526.)

Even though some Americans have a negative perception of fast food and prefer not to attend fast-food restaurants in order to stay thin, others consider this food acceptable. According to the recent survey, “fewer people said they’re trying to “avoid snacking entirely” — just 26 percent in 2005, down from 45 percent in 1985 — while 75 percent said they had low-fat, no-fat or reduced fat products in the last two weeks, down from 86 percent in 1999, according to the survey.” (The Americans are more accepting of heavier bodies. Fewer people say overweight people are less attractive, survey finds. Associated Press. 4:05 p.m. ET Jan. 23, 2006. Accessed on February 22, 2006 at URL: http://www.msnbc.msn.com/id/10807526.) The survey also discovered that in 2005, only 24.1% of surveyed people agreed with the statement: “People who are not overweight are more attractive”, while in 1985, 55% of respondents agreed with it.

Due to the existence of polar views on fast-food and “healthy” lifestyle in the society and constant changes in the number of people supporting either one, it can be concluded that fast-food industry is a very challenging environment, and that companies functioning in it need to constantly fine-tune their marketing strategies to adapt to changes. Whenever “healthy lifestyle” outlook becomes predominant, fast-food restaurants need to concentrate on the introduction of healthy options in their menu in order to retain customers. If customers’ tastes change in favour of fat foods, restaurants can remove some of “healthy choice” items from their menus for a while.

This paper seeks to determine the marketing strategies which McDonald’s has used in order to overcome fast-food industry challenges and evaluate how successful they were in the eyes of consumers.

The research aims to test the following hypotheses:

v   Negative attitude towards fast-food is currently predominant in the society;

v   McDonald’s is not simply a fast-food restaurant but a lifestyle brand which seeks to promote healthy lifestyle;

v   McDonald’s constantly re-adjusts its marketing strategy in order to target both customers consuming fat foods and customers consuming only “healthy” foods;

v   The most important element of McDonald’s marketing mix in targeting both groups of consumers is promotion;

v   All of McDonald’s innovations have succeeded in the market and have enabled the company to increase sales despite negative attitude of public to fast food.

In order to achieve the goal of the research and test the hypotheses, the following objectives have been set:

1.      Analyze customers’ current perceptions of fast food and healthy lifestyle and compare the results with data of previous years;

2.      Determine the most important element in McDonald’s marketing mix in overcoming negative public opinion about fast food;

3.      Provide a detailed characteristics of McDonald’s campaign aimed at establishing it as a lifestyle brand;

4.      Provide the analysis of McDonald’s innovations aimed at promotion of healthy lifestyle (such as sponsoring Olympic Games and introduction of Salads Plus in the menu);

5.      Evaluate McDonald’s marketing strategy based on consumer perceptions (with the help of questionnaire).

6.      Provide recommendations for the development of McDonald’s marketing strategy, given current opinion of fast food among the majority of consumers.

The research questions represent a very interesting area of investigations because they seeks not only to determine the marketing strategies which managers of McDonald’s came up with in order to overcome negative attitude of many consumers to fast food, but also to evaluate them with the help of primary research methods. Determination of marketing strategies is very important because it enables us to make a conclusion about which marketing tools the company has applied in order to be a success in the market. Evaluation of the marketing tools used by McDonald’s based on the research of consumers’ opinions will allow us to make a conclusion of how well the managers of the company managed to achieve their strategic goals.

Identification of the most important element of McDonald’s marketing mix in overcoming negative public opinion about fast food is crucial for the research. Promotion obviously plays a very important role in the company’s marketing strategy because the company needs to differentiate itself from competitors. However, it is important to analyze all other elements of McDonald’s marketing mix in order to test the hypothesis. Discussion of McDonald’s innovations, which were introduced in order to target consumers interested in healthy foods, is also a very important area of research. Since McDonald’s is the leader of the fast-food market and is greatly enjoyed by consumers, it is possible to conclude that all of its innovations have been successful. At the same time, even the most successful companies have had failures, and it is necessary to investigate McDonald’s history of innovations to make a final conclusion.

McDonald’s marketing strategy has been analyzed in many sources, including Cardona (2004), Clarke (2004), Kukec (2004), Salva-Ramirez (1995), Schlosser (2001), Silvestri (2000) and others. All of the authors argue that present day’s realities make the company change it product strategy in many ways, and McDonald’s has been very successful in the development of new strategies. According to Salva-Ramirez (1995), McDonald’s remains the leader of the market for many years because it “achieves uniformity and allegiance to an operating regimen without sacrificing the strengths of American individualism and diversity. McDonald’s manages to mix conformity with creativity.”

Introduction of new products by McDonald’s has been a very successful marketing tool to implement its strategy of winning over the market. It is easy to notice the following tendency: new introductions of products into the market became much more frequent during 1998-2004 than during 1955-1987. In order to respond to negative conclusions of nutritionists concerning negative effect of fast food on health, McDonald’s added a large number of “healthy” products to its menu. One of the latest introductions was McDonald’s “Salads Plus” which has their targeted group of customers in Sex and the City type ladies. In order to attract women who do not eat hamburgers and French fries, McDonald’s introduced the marketing strategy: “New food- for new people”.  The menu for these types includes Caesar salad, Quorn, yogurt, or even an apple. No matter how shocking the introduction was, the data shows that the company had a 56% increase in the first quarter profits due to their invention (Cardona 2004: 2). Seeking to attract the attention of the targeted audience, the company came up with the following advertisement: “These girls are also new in McDonald’s. Impatient Sophie, sensible Charlotte, and… Joanna, who’s always late! New food – new people, Salads Plus.” (McDonald’s? Or a trendy wine bar? Accessed on November 19, 2005 at URL: www.mcdonalds.com).

The strategy of McDonald’s being not a fast-food restaurant but a life-style brand is the most innovation which the restaurant has applied in order to minimize public’s negative opinion of fast-food restaurants. As Lawrence Light mentions: “Our strategy is to develop McDonald’s as a lifestyle brand- not just as a food brand.” (Clarke 2004: E1). People can have a negative attitude towards fast food because it is not healthy, but they will support a fast and active lifestyle which McDonald’s promotes. This innovation was destined to be successful due to its influence on the people’s way of thinking. As a part of this campaign, McDonalds became an official restaurant of Olympic Games. The reason of the choice of that strategy was to promote a healthy way of life. If McDonald’s is the official restaurant for Olympic Games, then many people would get an idea that food there is not as heavy as many sources argue. Besides, everybody wants to go to the restaurant which is engaged in sports activities.

 

Proposed methods

It is possible to conduct research on two types of data: primary and secondary data. “Marketing research routinely utilizes many types of data and information. The single most prevalent type is data and other pieces of information that were first collected for another purpose.” (Patzer 1995: 5). Despite the wide use of primary data, some types of research are usually based on secondary data, for example, “generally, marketing research relies on secondary data to complement primary data.” (Patzer 1995: 5).

In order to provide investigations on the research question, it is decided to use both primary and secondary data. Using primary data has very important advantages because it enables us to obtain the information, which has not been misinterpreted by other sources. Secondary sources are subject to the deep impact of their author. Therefore, it is very hard to obtain an objective point of view from such a source. However, there are some disadvantages of the primary sources of information, and therefore the use of secondary data in the research is well-grounded. Primary research has such disadvantages as additional time, expenses connected with interviewing and the need to analyze the data after the survey. By analyzing secondary data available in newspapers, magazines and on the company’s website, it is possible to determine all of the major elements of McDonald’s marketing strategy. The analysis of consumer perception of McDonald’s marketing activities can be analyzed with the help of primary research methods.

The primary method of research used in the paper is a questionnaire, aiming to determine and share the public’s opinions and attitudes on McDonald’s products and marketing strategies. The reason of this method choice can be explained through the advantages of questionnaire use. “The questionnaire is a widely used and useful instrument for collecting survey information, providing structured, often numerical data, being able to be administered without the presence of the researcher, and often being comparatively straightforward to analyze.” (Cohen, Manion 2000: 245). Questionnaire is able to provide answers of many respondents on the hypothesis question. The analysis of this data will give a relatively adequate vision of the question by the respondents. Questionnaire will be run on random 100 people outside or inside McDonald’s restaurants.

Maximum validity of results can be achieved due to the wide use of both qualitative and quantitative methods in the survey. Qualitative and quantitative methods always follow one another. “Anything that is qualitative can be assigned meaningful numerical values. These values can then be manipulated to help us achieve greater insight into the meaning of the data and to help us examine specific hypotheses.”  (Trochim 2000. [online]. Accessed on November 29, 2005 at URL: http://trochim.human.cornell.edu/kb/ index.htm). Some elements of quantitative research are going to be applied in the paper through the use of 5-Point Likert scales (strongly disagree/disagree/neutral/agree/strongly agree) in the questionnaire.

Reflections

Unfortunately, there is no single research method, which can lead researchers to completely accurate results. Every method includes a possibility of making some kind of mistakes. “The two major disadvantages pertain to relevance and accuracy.” (Patzer 1995, p.19). However, accuracy is much higher in research methods based on primary data rather than on secondary data: “Lack of relevance and lack of accuracy in marketing research are associated with using secondary data rather than primary data.” (Patzer 1995, p.19). Therefore, it is possible to conclude that the choice of primary sources of data in the survey is well-grounded.

However, it is necessary to note that the validity of the results is not going to be completely accurate due to the imperfections of the sampling process, which is used in the research. As Trochim remarks, “…you should appreciate that sampling is a difficult multi-step process and that there are lots of places you can go wrong. In fact, as we move from each step to the next in identifying a sample, there is the possibility of introducing systematic error or bias.” (Trochim 2000. [online]. Accessed on November 29, 2005 at URL: http://trochim.human.cornell.edu/kb/index.htm). The most accurate method used in the research is the questionnaire, because the opinions of the consumers provide an answer to the question whether McDonald’s marketing strategies are actually efficient and how they can be altered in future. The less accurate method is the analysis of secondary data because it is greatly influenced by the opinion of the author.

The following issues need to be taken into consideration during the design of the questionnaire and interpretation of results:

v    Respondents might purposefully give wrong answers. There is no possibility to avoid that in any survey. However, the interviewers need to make sure the respondents are interested in the research and do their best to give honest answers.

v    Respondents’ answers can be interpreted in a wrong way. Particularly this issue concerns the answers given to the open questions. The questionnaire will not include a large number of open questions but it will include some.

v    Questions might not reflect all of the issues which are being considered in the marketing strategy development and/or do not let respondents provide detailed answers. It is impossible to include all of the questions in the questionnaire which can be useful for the development of the marketing strategy. Long questionnaires are not always very efficient because respondents might get disinterested in giving answers for a long time. Therefore, it is necessary to ensure that the most useful questions are included in the questionnaire. It can also be harmful for the research if the questions to not let the respondent give full answers and give them a hint for the answer. The answers to such questions can be dictated by the interviewer rather than by respondent. It is recommended to “avoid leading questions… in such a way as to suggest to respondents that there is only one acceptable answer, and that other responses might or might not gain approval or disapproval respectively.” (Cohen, Manion 2000: 248).

It is also necessary to mark that the results of the investigations will be undoubtedly influenced by the position of the researcher. In my opinion, McDonald’s has been very successful in applying marketing tools, and there is a possibility that some of the information will be misinterpreted due to the researcher’s desire to support this thesis. However, the analysis of secondary information in which authors not always consider McDonald’s marketing strategies well-developed is going to provide a more objective point of view on the research question.

Timetable

v    Reading of relevant literature;

v    Drafting of research strategy and methods;

v    Development of questionnaire;

v    Data collection with the help of questionnaire;

v    Analysis and interpretation of primary data;

v    Secondary data collection on McDonald’s marketing strategies;

v    Analysis of secondary data;

v    Submission of a draft of MBA dissertation;

v    Revision of draft;

v    Printing of final dissertation;

v    Submission.

Bibliography

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Cardona Mercedes M. (2004), “Mass marketing meets its maker; McD’s chief espouses `brand journalism’ approach,” Advertising Age, June 21.
Clarke Liz (2004), McDonald’s Goes for Gold With Olympic Sponsorships, Washington Post Staff Writer.,Tuesday, August 17.
Cohen Louis, Manion Lawrence, Morrison Keith (2002), “Research Methods in Education”, Routledge Falmer, London
Creativity, New Advertising on the Menu for McDonald’s® at Cannes. Ronald McDonald® Stars In New Campaign For Olympic Games. McDonald’s Press Release. 06/23/2004. Accessed on November 29, 2005 at URL: http://www.mcdonalds.com
Fruit and Veg Health Drive Starts for McDonald’s Kids (2004), Western Mail, June 22.
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Kukec Anna Marie (2004), Key Promotions at McDonald’s, Daily Herald, July 16.
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McDonald’s Marketing Cited for Teens’ Obesity; Fast-Food Giant Calls Suit ‘Frivolous’ (2002). The Washington Times. September 10.
McDonald’s? Or a trendy wine bar? McDonald’s Press Release. 15/5/2004. Accessed on November 29, 2005 at URL: http://www.mcdonalds.com
Mercer David (1992), Marketing, Blackwell Business.
Patzer Gordon L. (1996), “Experiment-Research Methodology in Marketing: Types and Applications”, Quorum Books
Salads in Fast-Food Chains Contain More Salt Than the Burgers. Western Mail. December 1, 2005. 13.
Salva-Ramirez Mary-Angie (1995), McDonald’s: A Prime Example of Corporate Culture, Public Relations Quarterly, Volume: 40, Issue: 4.
Schlosser Eric (2001), Why McDonald’s Fries Taste So Good: A Trip to Northern New Jersey, the Home of the Natural Flavours. The Atlantic Monthly. Volume: 287. Issue: 1. January 2001.
Trochim, William M. (2000). The Research Methods Knowledge Base, 2nd Edition. [online]. Accessed on November 29, 2005 at URL: http://trochim.human.cornell.edu/kb/index.htm
‘Would You like Fruit with That?’ McDonald’s Gives Marketing a Healthy Twist (2005), Daily Herald, March 9.

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