McDonald’s Applies the Marketing Concept

McDonald’s Corporation, the American fast-food hamburger retailer, is a master global marketer. With
over 18,000 outlets in more than 90 countries and more than $23 billion in annual worldwide sales,
McDonald’s opens a new restaurant every three hours somewhere in the world. Credit for this
performance belongs to a strong marketing orientation: McDonald’s knows how to serve people and
adapt to changing consumer wants.

Before McDonald’s appeared, Americans could get hamburgers in restaurants or diners. But consumers
often encountered poor-quality hamburgers, slow and unfriendly service, unattractive decor, unclean
conditions and a noisy atmosphere. In 1955 Ray Kroc, a 52 year-old salesman of milkshake mixing
machines, became excited about a string of seven fast-food restaurants owned by Richard and Maurice
McDonald. He bought the chain for $2.7 million and expanded it by selling franchises, and the number of
restaurants grew rapidly. As times changed, so did McDonald’s. It expanded its sit-down sections,
improved the décor, launched a breakfast menu, added new food items and opened new outlets in busy,
high-traffic areas.

Kroc’s marketing philosophy is captured. In McDonald’s motto of ‘QSC & V, which stands for Quality,
service, cleanliness and value. Customers enter a spotlessly clean restaurant, walk up to a friendly
counter-person, quickly receive a good tasting meal, and eat it there or take it out. There are no jukeboxes
or telephones to create a teenage hang-out. Nor are there any cigarette machines – McDonald’s is a family
affair, appealing strongly to children.

McDonald’s has mastered the art of serving consumers and it carefully teaches the basics to its employees
and franchisees. All franchisees take training courses at McDonald’s ‘Hamburger University' in Elk Grove
Village, Illinois. McDonald's monitors product and service quality through continuous customer surveys
and puts great energy into improving hamburger production methods in order to simplify operations,
bring down costs, speed up service and bring greater value to customers. Beyond these efforts, each
McDonald's restaurant works to become a part of its neighbourhood through community involvement
and service projects.

In its restaurants outside the United States, McDonald's carefully customizes its menu arid service to local
tastes and customs. For instance, McDonald's India offers products developed especially for the Indian
market - particularly vegetarians. It serves only mutton, chicken, fish and vegetable products, not beef,
pork and their byproducts. Big Mac in India is called Maharaja Mac! It serves corn soup and teriyaki
burgers in Japan, pasta salads in Rome, and wine and live piano music with its McNuggets in Paris. When
McDonald's opened its first restaurant in Moscow, the company had to overcome enormous hurdles to
meet its high standards for consumer satisfaction in this new market. It had to educate suppliers,
employees and even consumers about the time-tested McDonald's way of doing things. Technical experts
with special strains of disease resistant seed were brought in from Canada to teach Russian farmers how
to grow nisset Burbank potatoes for French fries, and the company built its own pasteurizing plant to
ensure a plentiful supply of fresh milk, it trained Russian managers at Hamburger University and subjected
each of 630 new employees to hours of training on such essentials as cooking meat patties, assembling
Filet-O-Fish sandwiches and giving service with a smile. McDonald's even had to train consumers, most of
whom had never seen a fast-food restaurant. Customers waiting in line were shown videos telling them
everything from how to order and pay at the counter to how to handle a Big Mac. And in its usual way,
McDonald's began immediately to build community involvement. On opening day, it held a kick-off party
for 700 Muscovite orphans and donated the day's proceeds to the Moscow Children's Fund. As a result,
the new Moscow restaurant got off to a very successful start. About 50,000 customers swarmed through
the restaurant during its first day of business.

Riding on its success in Moscow, McDonald's continues to expand its worldwide presence. The 28,000
square-foot restaurant in Beijing has 29 cash registers and seats 700 people.

Thus, McDonald's focus on consumers has made it the world's largest food-service organization. The
company's huge success has been reflected in the increased value of its stock over the years: 250 shares
of McDonald's stock purchased for less than $6,000 in 1965 would be worth well over a million dollars
today