How McDonald’s

Became The
Leader in The Fast
Food Industry?
Virtual Webinar |
Dr.Randa Kenawi
BMAM 521
BUS 2020 FALL

Marketing Team Members |

Ahmed El Shemy
Norhan Ayman
Yara Mostafa
 INTRODUCTION
Mcdonald’s- Consumer Decision Making Process

About McDonald’s
McDonald’s has abundantly succeeded in
building an image and brand equity
dimension that supports a good quality
perception, value for money & positive
associations.
How McDonald’s is able to understand, adapt
and communicate with its customers ? How has
it made its experience always reliable , no
matter where the customer visits in the world.

2
Company McDonald’s
Corporation

Profile

Worldwide Close to 50 million 21.07 Billion U.S.

1940 (over 38,000 restaurants
daily customers dollars ( 2019)
in 120 countries)

Geographic Approximate
Founded McDonald’s
Areas Served Customers
Annual Revenue

3
 Vision Principles

To be the best and leading Quality | Speedy Service |

fast food provider around Cleanliness | Value

the globe.

Mission Value

To be our customers’ Serve | Inclusion | Integrity |

favorite place and way to eat Community | Family

and drink.

McDonald’s Message
4
 Value Proposition

The essence of the value proposition is to give consumers a reason to become a customer of your brand –
because the offering has aspects of value that are attractive to a particular consumer within a target market – as
is the case with McDonald’s value proposition.

Distinct products, such A broad range of food choices

as the Big Mac suitable for a variety of ages

Good value offering and

Fast and efficient service Convenient locations
pricing

Consistent quality menu Comfortable seating and in-

items store facilities
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 PRODUCTS

Hamburgers Breakfast Desserts, Beverages &

McCafe
Big Tasty, Big Mac, McMuffin,All
McRoyale, day breakfast, Apple pie, McFlurry,
Cheeseburger , etc. etc. Coffee, etc.

Chicken Other Products

McChicken, Grand Value Meals, Salads,
Chicken, Chicken Fries , Happy Meal,
Fillet, etc. etc.

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 The Mc Way

M
C A
Move Forward

D N L
Contribution Actively Listen

O D
Develop No Losers Leverage
Diversity

Open Deliver
Communication
7
Competitors

8
 History of the
McDonald’s Logo Design

9
 History of the
McDonald’s Slogans
•I’m lovin’ it (2003-present)
•It’s what I eat and what I do (2005, combined with 2003 slogan to make It’s what I eat
and what I do…I’m lovin’ it)
•What we’re made of (2008-present)
•My McDonald’s (1997)
•Did somebody say McDonald’s? (1997-2000)
•We love to see you smile (2000-2003)
•Put A Smile On (2000-2003)
•Smile (2002-2003)
•Food, folks and fun (1990-1991)
•McDonald’s Today (1991-1992)
•What you want is what you get (1992-1995)
•Do you believe in magic? (1993-1997, Happy Meal advertising)
•Have you had your break today? (1995-1997) And the list continues till
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1960 - “Let’s eat out”
Research &
Introduction
Development

Growth Product Life Cycle (PLC)  is a form of

business analysis that attempts to identify
a set of common stages in the life of a
commercial product.

McDonald’s now is in the maturity stage .

Thus, its primary objectives to focus on
when at this stage of the product life cycle
is to defend its market share and try to
Maturity maximize it profits.

McDonald’s uses the breakaway

positioning strategy to stand out by
combining its unique features found in its
products in all categories.

Example : Happy Meal in India

Decline
Product Lifecycle 11
 Business “ Think Global, Act Local “
How did McDonald’s succeed in becoming the leader in the fast food industry ?

Strategy
Well, the answer is simple, they managed to form a globalization and
internationalism strategy that helped them to grow significantly since their
inception.

Market towards family and Customer Satisfaction | Utilizing branding and co- Renovation & revamping |
children | Suppliers Relationship | branding | Heather menu options |
Recognizable Logo and Franchise Model | Usage of catchy slogans, Relaunching of products |
Icon, Jingles Sustaining Competitive Advantage message Applying CAGE Framework

Investing in Advertisements Rapid Growth & Brand

Maintain
& Franchise Model Market Dominance Positioning
Leadership

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 STP Analysis

Step 1| Segmentation Step 2| Targeting Step 3| Positioning

Geographic Segmentation Targeting implies choosing specific groups identified as a Positioning is achieved via a manipulation of the marketing
result of segmentation to sell products. How does mix 4Ps, and the positioning matrix demonstrates that certain
• America • Other Countries ( like combinations make more sense than others.
• Europe Canada, Latin America) McDonalds select/target the right segments?
• Asia/Pacific, Middle East, McDonald’s uses adaptive type of product positioning and
and Africa This would happen by having marketers iterate between accordingly, the company is engaged in periodical re-
understanding corporate fit and having information about positioning of products and services according to changes in
Demographic Segmentation
segment size and likely profitability. the segment (Dudovskiy 2016). The following is a direct quote
• Children from McDonald’s franchise strategy document:
• Teenagers
• Adults • Segment size & growth “McDonald’s has made itself to be the family friendly low
• Business Customer • Segment structural attractiveness cost restaurant in the fast food business. We have a narrow
• Company objectives & resource scope for a customer base and a low cost
Psychographic Segmentation strategy” (McDonalds 2016).
• Taste & Preferences • Cultural Dependent
( lifestyle, social

Behavioral Segmentation
• Personalities • Benefits Sought ( time
• Degree of loyalty effective, cost benefits )
• User Status
 Consumer Buying Behavior

Since there is a high tendency Put yourself in your

that people to imitate the
behavior of people around
them.- Influencer marketing -
spread of values
consumer’s shoes, look for
what would make them come
and come again. Value for
money, promotions, feedback,
ambience .

P
s Eco erson
Culture influences the
Force nom al &
consumer behavior greatly,
o c ial ic F
that is why the marketing S orc Know your customers and
strategy should be culture es engage them.
diversity.- Promotion and
products

Psy Force
es
orc

cho s
eF

log
tur

ica
Cul

l
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 Marketing Mix (4Ps)

Product- Focusing on their product and demands of the consumer

Price - focusing on the right price ( not too low
(what is relevant, assessing if the item is in decline in the product life
nor too high ). Introducing value meals, combo
cycle) – Offering certain items around a specific time. Focus on
meals,
familiarizing themselves with customer preferences and how to up-sell
to them. Always changing product line according to customers taste
preferences . Introducing healthier options

Promotions- Sales promotion. They utilize
public relations – having news stories (Ronald
McDonald House), events & sponsorships.
Messages behind advertisements as well
Place Targeting their types of customers. For example, children
want to visit McDonald's because it is a fun place to go
(playground, happy meal toy). A business person eats at
McDonald's because it is quick and can be eaten on the go.
Teenagers are drawn to the value menu items as it is more
affordable and that free wifi is available. Hygienic environment as
well.
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 Promotions

Rewards Popular Promotions

• Toys with Happy Meals

• Gift Cards
• Cars
• Free WiFi
• Pirates of the Caribbean
• Play Place & Parties
• Games- Monopoly/ Uno –Win various prizes and trips
• Subscription
• Collectibles- Coca Cola Glasses, Beanie Babies
• Coupon • Olympic Games- Global partner of the Olympic games- reflects our
• Online Booking commitment of the importance of sports and physical activities.
• Android App • World Champions- 1,400 children from 51 countries had the opportunity
to meet the world’s best soccer players at the 2006 FIFA World Cup.

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 SWOT Analysis
• Market leadership in the US • Unhealthy food on the menu
• Brand value and brand awareness • Declining brand image
• Sustainable business model • High employee turnover
• High level of profitability • Negative publicity
• Global presence • Low differentiation
• Beverage market

• Enhancing focus on nutritional menu • Food safety concerns

• Home delivery of meals • Fast food market saturation in developed
• Product differentiation countries

• Changing customer habits and new • Lawsuits against the company

customer groups • Currency fluctuations
• Growth of Franchise restaurants • Intense competition from local and
• Conservation ( going green ) international brands

• Improving CSR aspect of the business • Economic slowdown

• Increasing the extent of localization in • Change in Commodity price

international markets 17
 Competitive Advantage
• Striving to be cost leaders: prices cannot be matched by competitors.
• The speedy delivery of the food.
• Strong global presence and largest market share in fast-food industry.
• Net competitive advantage.
• They have been in the fast food business for a longer time than their competitors.
• Franchising requires less capital than other growth methods
• Rapid Expansion
• Market Dominance
• Franchising puts a "business owner" in charge
• Franchise locations may operate better and more profitably than "company owned" units
• Greater Buying Power
• Increased Name Recognition
• Increased Advertising and Marketing Budget
• New revenue streams are created
▪ Franchise Fees
▪ Franchise Royalty Fees
▪ Advertising and Marketing Administrative Fees
▪ Services provided to Franchises
▪ Sales of Products & Supplies
▪ Training Fees
▪ Sales of Promotional Items
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▪ Rebates from Suppliers
 Competitors Analysis
( Multi-Attribute Model )
About the Research

1. To study the consumption pattern towards fast food with respect to the
frequency of visits, choice of fast food outlets.
2. To analyze the consumer perception about two popular Food Franchisee
McDonald‟s and KFC.
3. 150 respondents - youth segment - between age 18 - 25 years
4. Questionnaire was used Conclusion
5. Chosen Stimuli
• Variety of products • Attitude of staff • This study finds that consumers attach great importance to various factors
• Speed of service • Location such as quality of food, facility layout, service quality – speed and cleanliness.
• Accuracy in service • Additional information • There is a moderate positive correlation observed between satisfaction level of
• Price • Customer service price of McDonald‟s products and the frequency of the visits to McDonalds. It
• Taste of products • Opening hours means more the consumer is satisfied with the pricing, more they visit the
• Packaging outlet.
• According to most of the consumers, taste and quality of ingredients of the
food items are the most important factors.

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 Competitive Advantage

Competitive Profile Matrix | Compares businesses & its Brand value of the 10 most valuable quick service
rivals & reveals their strength and weakness restaurant brands worldwide in 2020

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 Mcdonald’s Decision
Making Process

Applying Appropriate DMP

Operating more than one hundreds courtiers ,

Mcdonald’s needs to bring changes according

to people taste and demand. Today’s

1
2
generation is more conscious about the healthy

nutrition so in order to keep in view McDonald

each year brings some changes through

decision making process.

Problem Identification
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Define Problem

Problem Identification
Currently McDonald faces some
problems about the unhealthy food
in different areas. Its competitors
took the advantage of that
opportunity by delivering the less
fats and healthy food. McDonalds
in order to get back it positive
image it undergoes some decision
making process by using different
management approaches i.e.
administrative, political, and
classical approach
Mcdonald’s Decision
Making Process
Applying Appropriate DMP
• Administrative DMP | Administrative approach is used when only top level managers of
McDonald such as chef executive, managers and stockholder involved in decision making and
there is no involvement employees.
• Political DMP | When McDonald face some legal issues with in organization; in order to solve
that problems it use the political decision making approach.
• Classical DMP | McDonald classical approach is more effective and rational in decision
making process only manager deeply considerate the problem and then try to evaluate the
positive decision with positive outcomes.
• Democratic DMP | there is a less gap between the top level managers and employees.
Employees have a free hand to take part in decision making process. This makes employees
work freely and share their ideas with leadership.
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 Consumer Decision
Making Process

st
Low involvement Decision Po ase
u rch
P
Limited Problem solving / Types of Consumer
Habitual Decision Making
a t ion
lu as e
Eva of es rc h
Personal/Commercial/Public t iv Pu
e r na
Sources of Information Alt

Internal/External Search lem on tio

n
b a
Pro ficati form arch
e n ti I n se
Id Re
Physical/ Social/Psychological Risk

Performance/Social /Availability Attributes

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 Digitalization

Self-order Kiosks, food

Minimalist artworks of each Online Website - Golden Arches delivery, digital ordering, Taking novel approach in
product unlimited products online payments, AI for drive their latest campaigns.
thru

Social Media Marketing Branding Tactics In firm

Using Artistry
collaborations
with Tech Corps

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McDonald’s McDonald’s
Corporation

in Egypt

More than 80,000 Approximately 2.7

More than 100 branches
1994 across Egypt daily customers Million U.S. dollars
( 2019)

Geographic Approximate
Founded McDonald’s
Areas Served Customers
Annual Revenue

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 McDonald’s Initiatives

• McDonald’s employs more than 5,000 individuals and indirectly supports and provides employment opportunities for over 11,000 families.
• Over 90% of McDonald’s products come directly from Egyptian suppliers that are required to adhere to strict quality and food safety
standards. Its commitment to food safety encompasses the entire supply chain - from raw materials to customer care.

Mcdonald’s CSR Projects in Egypt

• McDonald’s offers numerous training programs for employees to provide the highest performance levels and customer service, while
providing a supportive work environment characterized by openness and cooperation.
• McDonald’s Egypt has been dedicated to supporting the community on two levels – nationally through charity causes and development
projects; and on the restaurant level through local initiatives.
• Ezbet KhairAllah Project since 2009
• Green Initiative in Egypt
• Support 57357 Children Cancer Hospital
• Renovated 22 nurseries and 8 primary schools
• Joint educational venture with the Faculty of Hotels and Tourism, Helwan University
• Enrolling non-university graduate McDonald’s employees in the Hotels and Tourism Open University program
• McDonald’s Egypt vision with this project is to provide children in unplanned communities the necessary education that enables them to be
part of the productive Egyptian workforce.
• McDonald’s has been enhancing its menus through its “Commitments to Offer Improved Nutrition Choices” initiative.
• Happy Meal Awareness campaign
• Football association - opening branches near big stadiums
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 Response to Covid-19
In partnership with their franchisees, they implemented additional precautionary measures to safeguard the well-being of our customers,
crew and communities:
• Encouraged all restaurants to move to Drive-Thru, Delivery and Walk-In TakeOut
• Encouraged restaurants to close down all dine-in seating, including suspending the use of self-service beverage bars and kiosks
• Supplied sanitizer for employees and customers who visit our restaurants
• Encouraged employees to wash hands even more frequently than normal
• Increased surface cleaning and sanitizing across the restaurant in high-impact areas
• Closed all Play Place attractions

In Cooperation with Misr El Kheir Foundation, Manfoods – McDonald’s Egypt provided more than 120,000 medical supplies such as
surgical masks, medical gowns and protective goggles to support quarantine hospitals in Egypt.

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 Top Ads

1997 2000 2014

The Iconic Mahmoud El Khteeb’s McDonald’s feeding the McDonald’s celebrating 20
(Bebo) with McDonald’s, after Egyptian mindset the idea years in Egypt with a
only 3 years from operating in
of being the number 1 in nostalgic ad
Egypt, which represents how
fast food market and
much McDonald’s understands 1999 2008 2019
the Egyptian Consumer number 1 choice for every
Behavior.
Again McDonald’s shows family The “fastest delivery in McDonald’s celebrating 25
how much it knows and Egypt” campaign, years in Egypt with a great
understands the Egyptian ad, idea and a dear to heart
consumer behavior with celebrity “Ola Roshdy”
funny catchy ad.

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 Trends
Emerging trends that McDonald’s is tackling

Healthier Options Advanced Social Media

payment methods

Third-party Online Ordering Value meals- low

delivery services pricing

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 Recommendations

•To provide more attractive offers and discounts to the consumers.

•To print and make the consumers aware of the nutritional facts.
•In addition to the fast food few health friendly food products can be added to the menu.
•To maintain their fast delivery and service. Also to maintain a stability in their services and quality of food.
•To provide a friendly environment for the consumers, that is friendly staff.
•Not only for the consumers but a work friendly environment should be provided for the staff.
•Attractive and innovative packaging as consumers do judge a book by its cover.
•Specials in the menu that are specific to that area.
•Food products must be verified by health Departments.
 Debrief
• Consumer Behavior involving different actors : ( Ex. of a family of 4 )
• Application of the perceptual process on your visit to McDonald’s : Stimuli - attention- interpretation - response -perception
• Maslow’s Hierarchy of Needs- Psychological need
• How both behavioral ( classical & operant ) and cognitive learning processes( modeling) apply on Mcdonalds -
• How Mcdonalds is associated with happiness ( Conditioning product association )& Stimulus discrimination ( Coca Cola - KFC & Pizza Hut ).
• Recall Test - Jingle
• How the different Functional Theories of Attitudes ( Utilitarian - Expressive - Ego Defensive ) apply.
• How the ABC Model of attributes applies.
• Strategic application ( capitalize on relative advantage & strengthen perceived product/attribute linkage )
• Update communication model is applied ( campaigns - social media - feedback - call center …etc.)
• How we care about applying internationalism and globalization strategy
• How diffusion of innovation happens
• The power of reference groups ( reward & expert)
• Marketing implication ( WOM - Influencers - User generated content - customer testimonials )
• Consumer Decision Making Process -
• How we are handling Digitalization ( Push New media communication )
• Mcdonalds in Egypt
• Campaigns
• Covid-19 31
THANK
YOU