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McDonalds

Initially the idea of fast foods marketing from McDonalds is more likely to target on kids and young urban adults who like to try something new, fast, simple and interesting. Marketing campaign and associating with merchandise from popular cartoons seems to be a reliable strategy. Kids are encouraged to eat at McDonalds because influence from advertising as exposure of this advertising coverage is getting wider as our nation progress. More and more families have at least one television set at home, and without doubt these growing children is most likely influenced by television advertising from McDonalds. Earlier McDonalds and Disney have a unique marketing alliance for toys merchandising associated with Happy Meals set. Toys give a away is a good bet for both company as Disney wants to make profit from its toys or cartoon character while McDonalds try to increase sales volume to kids target group by associating to popular culture. Income increase in families will also increase the opportunity to buy the McDonalds food package. Ronald McDonald is a mascot created together with other set of characters such as Hamburglar, Grimace, Birdie and Fry Gals and Guys, which is fun loving, caring and lovely characters for kids around the world. Young adults and teenagers still are a major target groups for McDonalds but these groups of peoples have a swift changing trends and preferences. In early stage, McDonalds seems to be a great and popular hangout place for students and teenagers. However, as people age and grown up, the McDonalds image and strategies has been question. McDonalds want to grow and move along together with its customers from young and morphing to the new generation. That is the motive McDonalds launched the Forever Young branding in 2006, which is major change over of image since 1970. Design, themes and restaurant layout has changed to spot more contemporary and chics look such as redesign of its logo, Wi-Fi Connection, spotting less plastic and more brick and woods design, television, specialized section such as for families seating and also those who celebrate party at McDonalds, better lightings and new products introduction that suits current lifestyle or taste. It is openly that McDonalds wants to have distinguished themes compare to other competitors and has a better retention of customers whom visit the restaurant outlets.alds target group is not just a mere fast food consumer but is more likely to change to be provider of family restaurant. McDonalds wants its customer base to be consisted from all lifestyle, age and different culture so it does not being stereotyped just a restaurant for kids and teenager. The seating layout, the food menu and themes redesigned to cater for more family oriented environment where all can eat at McDonalds whether it is breakfast, lunch or dinner. Not surprisingly, McDonalds is the pioneer among the big fast food operator for providing breakfast especially in its 24hours service restaurant. It positioned itself through revitalization of branding process such as the new image Im Lovin it which every countries in the globe speaking the same language as they experience McDonalds throughout their life and how it McDonalds fit into their life. With increasing care for healthy lifestyle and growing concern from public action group around the world criticizing fast food or junk food, McDonalds is quick changing itself to target more on healthy and nutritious food segment with constant reminder and information provide on balance food intake through websites and also its mascot, Ronald McDonalds. In conclusion, McDonalds target groups are not just from one segment but it is evolving more to a family oriented restaurant and people from all walks of life. Previously is more popular among the kids and teenagers but the concept is now more to cater the family, young adults and people from all culture and lifestyle. With changing of its direction and branding, McDonalds has position itself better than other competitors to be a healthy family restaurant providing good foods to all, rather than just a fast food operator.

2. Success of the company depends on the actors in the company microenvironment such as the company itself, supplier, marketing intermediaries, customers, competitors and publics. McDonalds is not different from any other company because the microenvironments factors can affect the operation or its sales. The Company

The most important factor comes from the internal company or precisely the management itself. Marketing managers must work closely with other department to come out with a strong marketing plan to boost McDonalds sales and efficiency of the operation. For example, the company management has a clear goals regarding importance of retaining customers by offering satisfaction to all its customers. This is not just the efforts alone from Marketing Department but involves hard work, cooperation and understanding from various parties. Customer Delight program may have been initiated by Marketing people but Human Resources Department must also involved providing substantial training to all McDonalds staff. Finance department must analyze closely on the cost benefits for the marketing programs initiated and purchasing must work closely with supplier to ensure the marketing plan is on track with the management intension. Therefore, it is clear the actors within company must work closely together to ensure the marketing meets its objective. The top management must also have clear goals on the future direction of the company, have well laid plan and clear understanding of the ever-changing business environment. Supplier Supplier is an important actor in the relation with McDonalds and its consumer. To have a good, continuous and no disruption supply, McDonalds must build a strong relationship with the suppliers. McDonalds must also consider that in the business market environment, it is competing with other fast food operators. Any strike, supply shortages and increasing of prices in market must be monitored closely by McDonalds to ensure it will not affect its bottom line performance. Simple economic rules, the more the input cost, the more the companys overall cost and pricing will be and thus it affect the volume of sales to customers. However, pricing is not as important as close relationship and integration that McDonalds must achieve with vendors to ensure sustainability of Marketing Intermediaries

Marketing intermediaries are company that helps other company to promote, sell and distribute the goods to final buyers. McDonalds is a franchise-based business, which headquartered in United States and with franchisee around the world. Franchise system is part of marketing intermediaries to actual corporate McDonalds in United States, which helps to popularize, distribute and expand McDonalds business concept around the globe. However, in the midst to expand the marketing of its brand around the world it must choose a strong creditable franchisee to ensure their business performance is in line with standards set by corporate. Financial intermediaries are important to ensure the financial transaction, assistance and insurance coverage for the business McDonalds operate. For example in United States. Without finance intermediaries, McDonalds also cannot source funds to finance its marketing programs or expand its business at will. McDonalds is promoting cashless card transaction to

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McDonalds also need logistic or physical distribution firm especially to help in distribution and transportation of goods and materials around the country to its restaurant. This efficient, no disruption logistic is important to have sufficient and smooth restaurant operation to serve the customers better in anywhere and anytime. In summary, all these marketing intermediaries are important to help McDonalds sell, promote and distribute its good to final consumers. Customers Customers whether it is business or household buyer are important actor in microenvironment where McDonalds operates. For McDonalds it is more on household consumers, which is changing fast in the market trend. McDonalds must have a clear market segmentation to differentiate the consumers group and has a special marketing attention to each of them such as kiddies, adult, working professional and teenagers with different taste of its food. Every consumers trend will affect the company bottom-line performance and if McDonalds cannot change or adapt to the changes of consumer behavior it might risk loosing the market. For example due to increasing trend for healthy lifestyle, McDonalds launched Premium Salads and Apple Dippers which is popular in the United States. Competitors Fast food industry has a wide range of competitors from small to big size in term of financial capabilities. For example in Malaysia, we have Kenny Rogers, KFC, Pizza Hut, A&W and MarryBrown and to smaller scale, we have Ramli burger stall around the street corner serving the niche market. These are competitors of McDonalds, which McDonalds must compete by offering a differentiation in term of value and satisfaction to its customers. Any values and benefits that McDonalds can utilize to differentiate it apart from all can be a strong marketing point to reach and conquer the market. Marketer must constantly understand ever-changing customers needs, needs by special group and develop strategies to strengthen the company positioning in domestic market. Publics Environment

McDonalds marketing environment also includes various publics which it interact with and has influences or potential interest to impact on the organizations ability to achieve its marketing objective. For example must understand citizen-action publics such as environmental groups in which questions its plastic packaging effects to environment. In India, beef burger is out of McDonalds menu list, as Hindus does not eat beef as part of their religious obligation. In Germany McDonalds is serving beer while it is prohibited in an Islamic country like Malaysia. If marketer cannot understand the requirement and needs of general publics, it will lose its interest, reputation and possibly the market. Media publics also will affect the marketing efforts from McDonalds with medium such as newspaper, television, magazines and radio broadcasting. As these media publics has wide reach to consumers, McDonalds must maximize its reputation and strength coverage and minimize the impact from the media on its weakness as media can carry and impact consumers opinion or decision in buying behavior. For example, an editorial column in newspaper that criticizes the effects of imbalance nutrients of fast food can affect general public opinion on McDonalds product. In the place where McDonalds operates, it must also know, understand and

accommodate to local publics that includes neighborhood residents and any operation must not have negative impact to the community such as pollutions and traffic congestion etc. McDonalds must also taking into consideration the government publics whereby government related issue such as operating hors, age limit for hiring, equal employment opportunities, product safety and health, workplace safety and health and honesty of advertising campaign must be coordinate and in line with the gazette law or government regulation. The success of McDonalds marketing will depends on all the actors or microenvironment variables as we discussed above and how McDonalds interact and combine all these elements to drive the synergy of McDonalds business operation. Clear understanding and management of these elements is the key for business growth, sustainability and success in the long run. 3. Strength i. Focus on quality service and customer satisfaction. Major Strength and Weakness of McDonalds

McDonalds stress importance to meet customers expectation especially in term of time of delivery and pricing. Customer perception of quality differs from one to another and for a fast food restaurant price, serving time and courtesy of front-line staff matter to the customers. For example is the Made for You slogan which promises zero waiting time for customers with innovative ordering system where food ordered are prepared in kitchen in real time from such a short time frame of 30 seconds. Another ways of ensuring fast delivery is through Drive Thru concept where customers can place order by driving through the counter with their car. This can save time from parking and waiting long queue for those who just want to take away the food. Customers expectation is to able to get what they needs right on time at any place in convenience way and McDonalds is morphing from just a fast food restaurant to value service provider. It is getting itself closer to the customers base so it can serve them better. For example fast ordering system like McDelivery will not only increase McDonalds business opportunities to those who are reluctant to travel to its physical outlet but also will delight the customers with the fast response. Customers will get their orders delivered to the front door by McDonalds staff riding on a scooter or even in traffic-congested Delhi in India; we have delivery on a bicycle. This is the efforts by McDonalds to serve the hunger and needs of consumers anywhere, anytime whether it is rain or shine and day or night. For example in Malaysia, McDonalds started 24 hours concept in 2006 with 72 selected outlets or drive thru station that operate on 24 hours basis. ii. Create a consumer retention program

Customer Delight program is the proof that McDonalds care for customers satisfaction and realized the importance of retention for business sustainability. The efforts such as serving free refills of soft drinks, casual contact with customers and managing the waiting line for the needy is an extra points for McDonalds to differentiate it from the rest of the competitors in the fast food industry. iii. Adapt to local.

McDonalds product menus are not standardized across the globe, as they will tailor some menu to suits local taste or requirement. For example in Malaysia we have Prosperity Burger

during Chinese New Year and Bubur Ayam McD, McVeggie for vegetarian and no beef served in India, McLaks salmon sandwich for Norway, McLobster in Canada, green tea flavored milkshake in Japan, McTurco kebab in Turkey, burger with rice in Hong Kong, avocado sauce serve in Chile, beer serve in Germany and etc. Localization means McDonalds does not simply enforce total American value to the countries it operates but it also tries to suit the taste, needs of the locals and sometimes where it is due to cultural and religious obligation. For example, no beef and pork serve in predominantly Hindus and large Muslim minority India or only Halal slaughtered meat in Muslim nations such as Malaysia. McDonalds tailored products are not just gaining popularity with local consumer but also implemented in other countries where McDonalds in. True understanding of locals preference results in gaining popularity of McDonalds product, potential new business products introduction in other country and sustainability of marketing success around the globe. iv. Understand Consumers Trend and Needs

Fast food operator has always been target from consumer groups for its unhealthy and poor nutritional contents, junk food image and main source of obesity in many young consumers. Relying on cheap and quick service is not a guarantee anymore to ensure brisk sales for the fast food chains. McDonalds able to identify the trend for appreciation of healthy lifestyle and balance nutrients has been aggressively promoting itself as nutritious food provider. Its website is giving a lot of information to customers regarding the nutrients contents of the food they are taking. This is good for not to give false impression to customers that taking a lot of fast food is good for them and by giving correct information, consumer can make their own decision. There is a hotline to serve and react to customer feedback or complaint to improve the services or products offered by McDonalds. With urban professional class getting bigger and bigger, McDonalds also begin to adapt by offering more elegant looks in its layout design, offering special seating and Wi-Fi access to tech-savvy consumers who eat in the outlet. v. Training to employee

The good things for this company is it provide a good training to all staff and especially to those involve in management level. Even in Malaysia, many management staff sent to Chicago to training on managing the operation of McDonalds outlet. Hamburger University in Illinois Chicago has graduated more than 70,000 managers who leads and manage the operation of McDonalds outlet in the standard push upon them. Culture of training also prevails at McDonalds with over 32 hours of training for all new employees to ensure they understand the requirement and aspiration of McDonalds for continuation of best fast food restaurant service provider to the customers. McDonalds keen to train its own people and mission to be the best talent developer of people with the most committed individuals to Quality Service, Cleanliness and Value (QSC&V) in the world. vi. Superb Supply Chain Management

To have a large-scale operation of restaurants around the world whether it is owned directly by McDonalds or its franchise, it is not easy to manage its supply chain network that is extensive. Furthermore, when McDonalds making inroads to unchartered market territory it face ambiguous supply assurance in correct quantity, price and time to serve the large customer base. McDonalds always build a long lasting relationship with suppliers or vendors

to ensure the sustainable supply that meets its quality standard and volume. Sharing of knowledge with suppliers and linked the local supplier with international reputable one helps McDonald to attain highest quality material delivery to its door while an effort in building up a win-win situation for both is essential to ensure the success preserve and share for a long period. For example in India, McDonalds has bring increase of knowledge in managing suppliers business operation, increase of yield for crops, better management of waste and cleanliness and maintain quality standard to meets its requirement. Weaknesses i. Poor Publicity of Unhealthy Fast Food

McDonalds and other fast food restaurant has been victim criticized by public for creating unhealthy lifestyle and obese consumer especially children. Wrong marketing tactics such as associating McDonalds Happy Meals with toys set to influence children is condemn by public. Children wants to buy the food just for toys and unhealthy or unbalance intake has cause obesity especially those in urban areas with access to fast food restaurant. Poor initial tactics such as Big Size menu also being criticize because it encourages people to eat more without considering calories intake that is balance as required. Fast food said to have high cholesterol, oily and with high contents of fat and sugar that increase the risk of diabetes, obesity and heart related diseases. Malaysian government also considering ban fast food companies from advertising in kids related programs to deter such influence to the children consumers. There are few books written by international journalist targeting the fast food operator also affecting the reputation such as Super Size Me, Fast Food Nation and Chew on This. Poor publicity and control in advertising may have influence the business of McDonalds and efforts to build healthier image may take some time before the program succeeded. ii. Costly Rebranding

Even though McDonalds has been constantly trying to rebrand it to compete with other competitors with Forever Young slogan and it may take time. With more than 33,000 restaurants in different location around the world, it is not easy to rebrand and recreate new McDonalds image without substantial amount of investment involves. This includes cost for relay out, building restructuring, logo changes, material and facilities purchases, painting and advertising campaign and not all may involved and transform standard as there are a lot of these restaurant with franchisee involvement whether in sub-urban area, airport, shopping complexes, big cities, kiosk or even small section in petrol station around the world. iii.Poor Global Image

McDonalds has always been a target for anti-America activist around the world, with risk for being vandalized, boycotted or even been physically attacked such as happen in Saudi Arabia, China, Beirut, Istanbul or Indonesia. Golden arches seem to be things associated with United States each time happens a confrontation between a certain nationalist and United States. With ownership increasingly by McDonalds, such as in Malaysia where McDonalds bought back the ownership share the risk is not being shared with the locals. It is also seen a symbol of capitalist that angered a lot of anti-capitalism activist around the world. iv. Difference due to Franchisee

McDonalds has more than 33,000 restaurant world wide by franchise around the world is having a different standards even though the concept of franchise business is the same. This is due to capital difference unable them to implement all McDonalds headquarter program such as Made For You which needs a lot of investment. v. Food Quality

Due to fast services introduced, foods are prepared upfront and not hot anymore when serve to customers. This already deters people from going there if they want a feeling of eating is restaurant with fresh and hot foods serve to them. 4. McDonalds is part of a company in a diverse fast food industry, which included many competitors that operates globally. According to Wikipedia (2007) fast-food restaurants, also known as "Quick Service Restaurants" or QSR are part of restaurant chain or franchise operations, and standardized foodstuffs are shipped to each restaurant from central locations. Fast food operation is very diverse and not only focus on restaurant buildings but also can be from stand and kiosk anywhere. Basically McDonalds competitors can be group into 3 categories as below: Same Segment Direct Competitors

Direct competitors are those who are operating almost the same business concepts as McDonalds which is utilizing on same theme franchise buildings layout, standardized food menu, fast service which food are prepared and served quickly, high start-up capital to own a franchise business, popular branding which is mostly from United States and almost all also are selling the quite similar product. In Malaysia, the fast food industry competitors for McDonalds can be from few internationally successful franchise business operations such as: Burger King, a major competitor for McDonalds because selling almost same popular product from McDonalds which is the variety of hamburgers. MarryBrown a Malaysia owned grown franchise brand, which sells variety of fast food such as fried chicken with rice, spaghetti, salads, burgers, fries, etc and Halal certified restaurant that has since expanded to many Islamic countries such as UAE, Iran and Saudi Arabia. Kentucky Fried Chicken through KFC Holdings, which has a niche market in specialized pressured -fried chicken, burgers, and fries which is a popular fast food brand in Malaysia. KFC has many outlets mostly in shopping complexes and highly populated area and it is comparable to McDonalds in term of influence and exposure in Malaysian market. Most people or consumer will consider McDonalds and KFC is substitutable due to comparable numbers of outlets and influence in Malaysia. KFC is part of Yum! Brands Inc, which also owned Pizza Hut, A&W and Taco Bells and was once a spin-off from Pepsi Co. That, is why we are seeing why in KFC they are selling Pepsi Cola and McDonalds with Coca Cola. Pizza Hut also a part from Yum! Brands chain and in Malaysia it is under KFC Holding. It specialized on selling varieties types of pizza and side dishes such as salad, tempura, lasagna, spaghetti, breads, soups etc.

A&W a fast food operator that specialized in hot-dogs and root beer. This company has not been a major player in Malaysia fast food industry even though it was once a pioneer during the 1960s. Few outlets have been concentrated at shopping complexes but do not pose a major threat to McDonalds. Other Significant Direct Competitors

However, recently rather than focus on direct competition in fast food industry, McDonalds began to venture into more affluent business segment such as coffee house. On certain angle, McDonalds seems to be in direct competition with Starbucks in providing tasty and value for money coffee to consumers. As most of the McDonalds outlet will be concentrating in big cities or town in commercial and shopping area it will be in direct competition also with other restaurant operators which has mushroomed all over the country. Even though other restaurant may not provide the same value as eating in QSR, these restaurant chains in shopping complexes have almost the same pricing and fast services provided by McDonalds and together with more choices to consumers can be a threat to McDonalds business. For example in Malaysia, we have mushrooming of these new restaurant chain concepts such as ChooperBoards, Manhattan Fish Market, The Chicken Rice Shops, Secret Recipe, Sushi King, Nandos, and etc each offering a unique food type and experience to customers. These restaurants offer different range of pricing which will suits the different income level of customers who are opting to dine at the area. Furthermore with increase of income level in urban area and cities in Malaysia for example, personal income Small Direct Competitors

Small operators such as those operating stalls, kiosk or stand may not hurt McDonalds profit margins or business directly; they do pose a competition with McDonalds to gain customers. Even though small in term of capital and sales volume, selling burgers and hot-dogs kiosk or stand in Malaysia is popular especially during night. Consumers are not hesitating to buy from this small time vendors as they are lowly price as low as RM1.20 to RM 5.00, quick to serve, tasty and suits the local preference and available almost anywhere in town, sub-urban or even rural area. Ramli Burger popularizes this concept of selling roadside hamburgers and it is almost accepted by wide range of customers be it from every income level, age or races. 5. McDonalds has outlined several programs to improve its current customer services so to create competitive advantages over other fast food restaurant. Among of the plans outline as part of McDonalds efforts are: Capturing Feedbacks from Customers

Consumers reaction are essential to determine the level of McDonalds brand acceptance in the market and if McDonalds are not responding fast to their needs it may end up losing the market to other competitors. Good source of improvement in customers service is by getting the feedbacks or complaints directly from the customers through customers service hotline. Customers may sometimes suggest ways how we can improve further whether in term of quality, pricing or cleanliness and responsive company will react to satisfy them. With the advancement of technology, customers hotline does not only focus on telephone but also through websites. For example is the website of McDonald Malaysia that can grab

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Made For You concept which is implemented in a lot of McDonalds outlet worldwide is an innovative program to improve the total satisfaction to customer. Few highlights fro this program included improves waiting time for this fast food outlet where customers who order can expect to receive their meals in 30 seconds period. This involves total realignment, redesign and investment on kitchen equipments, staffs attitude and material to ensure all customers are satisfy with the fast and quality services. Investment in information technology is essential to keep up with the hectic ordering process and improvement in packaging methods are also part of the programs to ensure the goods receive by customers right on time and maintains on the freshness. Continue Delighting Customer

McDonalds continue to provide total satisfaction to customers by constantly giving the training to its staff with its well-structured program. New entre will be going for Crew Orientation and Crew Development Program (CDP) with some of the training topics including grooming for personal appearance and development of customer service skills. In advance stage such as being a management trainee also has a lot of customer service course such as Customer Satisfaction and Recovery during Basic Shift Management (BSM) course. This is essential to enable to service crew members can provide good service to all customers.[23] In Malaysia on certain McDonald outlet, we can see Customers Delight program where staff goes around serving free soft drinks refill to customers, taking orders from customers outside the counter where the waiting line is too long, providing casual contact and constant smile with customers to portrays friendly image to all. McDonalds continue to be available for customers all the time when needed. For example is the introduction of McDelivery to enable customers to order from call to send to their doorstep and 24 hours McDonalds outlet enable people to have breakfast, lunch, teatime or dinner all the time. Forever Young concept quickly changes the McDonalds image to be relatively vibrant, exiting and always relevant to customers no matter whom they are what they do and how old they were. Many facilities incorporating current trends and needs from customers such as providing better lighting, better seats whether family oriented or personal stand-up bar table, Wi-Fi access to those utilizing wireless internet devices and need to work mobile from anywhere, music and etc. Customized Menus

McDonalds continue to tailor its menu according to the acceptance of the market because certain customers in certain market prefer certain menu from the restaurant. For example in Malaysia, Prosperity Burger, Bubur Ayam McD and Ayam Goreng McD is unique to us because our market demand these type of menu. In certain country like Japan, people serve green tea, Germans with beer, Norway with salmon based burger and kebabs in Turkey reflected the nature of preference by different races around the world. Customization will delight customers because its shows that McDonalds understand their needs besides focusing on business.

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With poor image associating fast food to health issue around the world, McDonalds has stood up to change its image as healthy food provider to family. It provides information on nutritional intake, calories, and balance healthy lifestyle information to customers. In its website information such as calories counter and healthy food advice available to customers who access it. It also use Ronald McDonalds as a mascot to encourage children such as through Fitness Fun program launch in 2004 where Chief Happiness Officer incorporating fun music, magic and exercises to children. McDonalds also sponsors of Olympic organizing Olympic run as yearly event to get close to customers while doing this physical activities. All the efforts show that McDonalds trying to have sustainable customer relationship as win-win situation whereby it does not only focus on doing business but also commitment to the society by creating awareness on the healthy lifestyle. In conclusion, McDonalds are executing all these customers service improvement programs to constantly portraying itself as a friendly, healthy and quality food provider to customers. McDonalds is trying to build long-term relationship with customers to ensure the retention rate in the market where competition is tough between all the fast food restaurant operators.