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1.0 Introduction………………………………………………………….. Pg. 2
2.0 Overview of McDonald’s Corporation……………………………… Pg. 3
3.0 Marketing Strategy………………………………………………….. Pg. 3
3.1 Marketing Mix…………………………………………………… Pg. 4 – 6
3.2 Michael Porter’s Five Forces Theory ………………………….... Pg. 7 – 10
4.0 Conclusion…………………………………..……………………… Pg. 10
2010) McDonald’s Corporation is a multinational company.0 Marketing Strategy Marketing strategy is the strategies that implemented in a venture to observe the company’s mission and overall operations. who actually founded the business and opened the 1 st McDonald’s Corporation as a franchise agent in year 1955. the marketers can create demands and influence the customers with their own products by studying through 4P (Price.1. (QuickMBA. Michael Porter’s 5 forces theories help a business to identify their potential threats and how to gain the market and maintain customers from switching to competitor brands. and Place) (NetMBA. By understanding marketing mix strategy. McDonald’s was founded by Ray Kroc. Promotion. Every multinational company will have issues when they enter a new market. Product. The business began as a barbecue restaurant in year 1940 by Richard and Maurice McDonald.0 Overview of McDonald’s Corporation McDonald’s Corporation is so far the largest hamburger fast food restaurant in the world. 2011) 3. they sell fast food and provided other beverages and it can be found in 118 countries. Further in year 1948. McDonald’s Corporation focuses on hamburger as their main product. Ray Kroc foresees the large potential business worldwide growth so he had subsequently purchased the chain restaurant from McDonald brothers. Marketing strategies play important roles in business growth to create more awareness to the publics and to gain customers from competitors too.000 restaurants worldwide and employing more than 1. (McDonald’s Corporation. Through marketing strategy.5million people to work in their corporation. 2010) 3 . They have over 33.0 Introduction It is important to implement marketing strategies in businesses for the organisation to get recognition or to enter a new market. 2. the business has changed to a hamburger stand. there will be clear goals for the company to achieve.
By selling their franchises. McDonald’s deliver both products and services to their customers through direct distribution channel. It makes their products convenient and easy to find for the customers. There are four elements in marketing mix. 2010) 3. Each element has to appear at the right time to make the perfect match. The more McDonald’s outlets in the world. there are McDonald’s restaurants located within the same area. or the corporation itself.1. promotion and price. or when their competitors have come out with new products. They need to identify the potential market so that they can operate their businesses at the right place. the faster McDonald’s Corporation can achieve the economies of scale. 2011) McDonald’s sells their product through franchisees. Cluster Analysis is where those individuals groups that is similar to each other but yet different. In a business.3. McDonald’s restaurants are available in almost all of the countries. there’s no wholesaler that distribute McDonald’s products. 2010) Both indoor seats and outdoor seats are available in their restaurants. product. 4 . McDonald’s did so to enables the entrepreneurs to join them.1 Place In marketing. McDonald’s can obtain ideas from the entrepreneurs to improve their corporation while they can earn from their sales. McDonald’s grows rapidly and McDonald’s have become globalized. McDonald’s sells their franchises to the publics. either dine in or drive through. It can be identify by customers’ buying behaviour or demographic. McDonald’s can get information from the competitors easily when their competitors have better promotions than McDonald’s. We can find a lot of restaurants are located at the same area or some are just next to each other. McDonald’s must see their targeted location and review the people’s lifestyle or culture. marketing mix plays an important role for the business to identify their potential market and to increase their profit levels. (NetMBA. which are place. (Rohini Upadhyay. Whenever there are fast food restaurants.1 Marketing Mix Marketing mix is where vary factors were mix together to achieve a perfect marketing plan. place is a very important factor for a company to set up their business. (NetMBA. affiliates. It is where the businesses deliver their services or products to their customers. Distribution channels is the ways of the company delivers their products or services to their customers from the beginning until the end.
In some McDonald’s restaurants. In year 1968. (NetMBA.4%. it has been appeared in many of their commercials to attract children and to bring the info that McDonald’s is a friendly and happy place for everyone. nuggets. the restaurants offer wireless internet for their customers. 2011) Therefore. they focuses on producing vary types of burgers and also side dishes to attract customers. which is a playground for the children. 2010) Hamburger is the main product in McDonald’s Corporation.2 Product In product. the recent product that introduced to Malaysia market is “Chicken McBites’ McDonald’s in Malaysia labelled their product “Halal” so that it underwent Muslim religion’s respect.3. it can be services or things that the company sells to their customers. The company need to see the opportunity of the market and come out with suitable products to fulfil the market needs. McDonald’s restaurants sell their hamburgers either in a set or ala carte and their products do not have pork at all. In year 1967. (The Office of Electronic Information. they keep coming out with new products and new burgers. Bureau of Public Affairs. 2011) Certain McDonald’s outlets operating their business 24hours a day. McDonald’s are well known globally. obtaining a halal certificate is important for McDonald’s. McDonald’s practices continuous innovation. The population of Muslim in Malaysia is 60.1. McDonald’s developed their double arch logo. which is a clown with red haired and clown face paint called Ronald McDonald have brought to the public by McDonald’s. it actually attracts more youngsters to dine in McDonald’s or socializing in their outlets. The logo consists of a yellow M alphabet with red background. Everyone meal purchased comes with a softdrinks and French fries. McDonald’s have this McValue Meal and Happy Meal to make their customers feel that the product is worth to purchase. Every McDonald’s outlets have to set up their logo. The parents can enjoy their meals while their kids playing at the playground. They also have family dinner box in Malaysia outlets which included their burgers. Fast food is usually targeting youngsters. drinks and also the French fries and desserts. we can see “PlayPlace”. it enables people to easily recognize their restaurants with the simple logo. (Brand Symphony. but offering family dinner box indirectly broadens their target market. McDonald’s should offer some sofa seats for the customers and McDonald’s can gain even more customers from Starbucks and other competitors in Malaysia 5 .
they have different slogans.4 Price The marketers need to target their market and to set their price according to their targeted customers. or banners along the highways.3 Promotion Promotion is usually used in marketing to attract potential or current customers. McDonald’s developed this to target the youngsters and the commercials shows that there were people having fun while enjoying their meals at McDonald’s. and also fries. McDonald’s created the awareness to the public and indirectly. It is the tool for the marketers to generate marketing communication and to create awareness to the publics too. 2010) In TV commercials. newspapers and also radio stations to promote their products. In the morning. In Malaysia. which talk about their breakfast set promotions.1. there will be commercials about McDonald’s breakfast set. Most of the people recognize McDonald’s when someone start singing the song. While in the afternoon and night time. The customers can be persuaded by the marketers to meet their needs by the marketers’ offering. The commercials can be seen all over the TV. the price of McValue meals was further discounted during lunch time to target those working individuals. The commercials repeat over and over again for certain period of time to makes people remember about it. Customers want their product to worth the price they 6 . (NetMBA. Advertising during the right time can attract customers with their promotions. While the other outlets. It tries to generate positive customer responses. A McValue meal comes with a burger. This makes their restaurants attract more crowds during the lunch time. This is actually to attract the Muslims in Malaysia and gain more customers from their competitors. softdrink. It may be based on the potential customers’ income level. During Ramadan period. There was a branding campaign carried out by McDonald’s Corporation to support their slogan “I’m Lovin It” for most of their franchisee. heard from the radio broadcast. McValue meals were discounted at dinner time. or how much are they willing to pay for the products.1.3. Corporation advertises through TV commercials. McDonald’s commercials will play for the whole day according to time. 3. McValue meals were launched in year 1985 globally. there will be commercials about McValue Lunch and Family Set.
Where selling their products in a set at cheaper price. McDonald’s uses price bundling strategy. Promotional pricing is also one of the strategies from McDonald’s. drinks and fries and the price is cheaper compared to its main competitors such as Burger King. where Burger King sells their Chicken Fiesta Meal with only 3 burgers. 2010) McDonald’s pricing strategy brings value to their customers. this enables McDonald’s to price their products lower by cutting the portion of their products smaller to fulfil the Asian’s. Wendy’s and Carls Jr. (QuickMBA. French fries. nuggets. It helps the business to determine the weaknesses and strengths in their own company as well. Asian’s appetite is smaller compared to US or UK country. supplier power. threats of new entrants. the cost will be more expensive compared to just paying for a set of McValue meal or Happy meal which included everything and cost cheaper. (NetMBA. where they will set the price of their products by comparing to their competitors’ similar products. McDonald’s sells a full set of meal including the burger. McDonald’s can come out with better deals and attract the market. 2011) We can see that McDonald’s earned the advantages in pricing strategy compared to their competitors. (McDonald’s Corporation. McDonald’s further extended the discounts from 6pm to 9pm as well. beverages and also dessert. 2011) McDonald’s also have “Family Dinner Box” which included 3 burgers.00. (McDonald’s Corporation. 2010) 7 . 3.pay. McDonald’s in Malaysia have this “Weekdays Breakfast Special” (McDonald’s Corporation 2011) where their breakfast set at pricing from as low as RM4.95 during 12pm to 3pm daily. while KFC is competing with McDonald’s and came out with variety sets but pricing higher than McDonald’s. 2011) If the customers were to buy softdrinks. buyer power and threats of substitutes. (KFC Holdings. fries and burgers separately. Products that are low pricing may lead the customers to think that it is a low quality product. as during Ramadan period. McDonald’s in Malaysia sells their McValue lunch beginning from RM5.2 Michael Porter’s 5 Forces Theory Professor Michael Porter’s five forces theory helps the multinational company to identify their threats and risks that may occur when the business is entering a competitive market.90. French fries and a bottled drinks at RM33. The five variables in this theory are rivalry. (Burger King Corporation. nuggets. only selling at RM29. and pricing too high may lose customers. 2011) McDonald’s also uses competition-based pricing strategy. profit gets lower and decreasing in sales.
(Kashan Pirzada. 8 . McDonald’s have already achieved their economies of scales. (Kashan Pirzada. McValue Lunch Set which lower down the price of the meals helps McDonald’s to stay strong at the credit crunch. There are barriers of entry when a business is entering a new market as the existing competitors are trying to protect the market from their new competitors. McDonald’s is not the only fast-food outlets that offering best deals and services. 3. even Mamak food stalls or any food stalls in Malaysia can be McDonald’s substitutes.1 Threats of New Entrants When a company profits and market share is increasing. Coming out with affordable prices on their meals attracts most of the working individuals or students to select their restaurants rather than going for other substitutes. 2011) McDonald’s pricing strategy has been trying to maintain their market again. there will be other new firms trying to enter to compete in the high profits market. With the comfortable environment they have and refillable drinks.3. 2008) The reputation of McDonald’s makes other competitors difficult to enter their market and gain their customers with their affordable prices and credit crunch. whether they want to go for other substitutes rather than choosing McDonald’s. McDonald’s market is strong as their burgers have created customer loyalty and makes some of their customers cannot decide whether to choose substitutes products and with the pricing and promotional strategy. Some of their customers may even choose to eat at home rather than going to spend extra on their meals.2.2 Threats of Substitutes McDonald’s Corporation’s substitutes can be very common in Malaysia. (Demetris Vrontis and Pavlos Pavlou. and as when credit crunch happens. This is depends how customers judge on McDonald’s. it makes their customers even harder when they want to go for other substitutes. 2011) McDonald’s is already a well-known brand around the world. so it already has a very strong influence power in Malaysia market. it makes McDonald’s customers to change their mind and rather eat at home and not going to pay extra for their meals. McDonald’s created strong barriers of entry to the competitors as McDonald’s has the competitive advantage in pricing and promotional strategy.2. the customers’ decision becomes clear. The new comers need a very high investment cost to enter McDonald’s market and the risk is high as McDonald’s is a mass producer around the world where new comers will have problems of high production cost and they cannot lower down their selling price or else they are not making any profit.
and also because of the long-term relationship between Coca-Cola and McDonald’s. (Demetris Vrontis and Pavlos Pavlou. whereas the beverages were supplied by their major supplier.4 Buyer Power Buyer is the one that raise our market shares and pay for our products. Coca-Cola have been McDonald’s main beverages supplier since the beginning until now. machineries. McDonald’s are now using their own McDonald’s eggs. Establishing good relation between the buyers and the business may lead to more loyal customers and maintain the profit level of the business. Recently. It is actually a strategy to make their customers stay longer at their restaurants and also gain customers from their competitors which doesn’t offer such services. it enables McDonald’s to sell their drinks “bottomless”. 2008) The prices of the products are based on the customers. They provided nutrition information for each of their product for the public so that people can get knowledge about their products and see how McDonald’s maintain their products’ quality. it means McDonald’s customers can refill their beverages for unlimited times in Malaysia. The possibilities of customers switching to other brands are relatively high as the switching cost is low so McDonald’s should work hard on achieving customers’ satisfaction. and other stuffs. 3.2. Supplier plays an important role in a venture.3. McDonald’s practices value chain supply concept. McDonald’s keeps their customers satisfied by maintaining the pricing strategy that attracts customers and maintain loyal customers from switching to competitor products. Their offering on seasonal promotions or limited time promotions 9 . they are not only doing restaurant businesses but also produces their own supplies such as potatoes and also might producing other raw material for themselves too as the market price for certain products are increasing rapidly.3 Supplier Power A company that sells products need vendors to supply raw materials.2. 2011) McDonald’s produces most of their products. Bhd. Coca-Cola Company and F&N Sdn. A company need to build good relationship with the suppliers so that they can get reasonable price for their raw materials. (Kashan Pirzada. McDonald’s dropped Sparboe Farms from one of their supplier for eggs when it found that the company is involved in animal rights and cruelty charges and in the meantime. McDonald’s maintain their customers with their quality of products too.
3. (Demetris Vrontis and Pavlos Pavlou.2. Burger King.such as McValue Lunch Set or Prosperity Burger attracts even more customers to come and dine at their restaurants. McDonald’s is a very successful fast-food corporation and it is well-known in every country. McDonald’s continuous innovation process is the strategy that keeps their customers satisfied. 2008) After McDonald’s invented on their recipes and studies the public’s concern. The strong competition on the fast-food market makes McDonald’s often comes out with their best deals promotions on their products and give their customers more reason to choose their products. Wendy’s and Carls Jr. and it is actually benefits the business from competitive strategy.0 Conclusion Marketing strategy is important to every organization. If McDonald’s don’t come out with such new promotional strategy. That people here are concerning about healthy food product and previously were complaining that McDonald’s products are less health concern. McDonald’s launched their new product. and it can be uses to change the attitudes of the customers and indirectly attracts the potential markets too. “Chicken McBites” in Malaysia. We can find McDonald’s outlets in almost every corner of the world. Having competitors in a business does not bring disadvantages. (Kashan Pirzada. With marketing strategy. our business can achieve the economies of scales and increase our profit level together with the market shares.5 Rivalry Rivalry refers to the competitors of the business. It helps the marketers to identify the possible market instead of blindly having promotions or advertising. they will switch to McDonald’s competitors instead. as their brands and products are already well established too. 10 . the marketers are not only using it to promote the products. 2011) Whenever McDonald’s customers face dissatisfaction issues. 4. their customers may easily switch to other brands. McDonald’s main competitors are KFC.
managementparadise. The McDonald’s Story [online] Available at: http://www.state. Brand Symphony. Available at: http://brandsymphony.mcdonalds.mcdonalds.my/highlights/hariraya11_promo.asp [Accessed 22 November 2011] McDonald’s Corporation. 2011.html [Accessed 21 November 2011] The Office of Electronic Information.mcdonalds. Weekday Breakfast Special™ [online] Available at: http://www. McValue Lunch™ [online] Available at: http://www. 2011.my/abtus/corpinfo/history. 2011.asp [Accessed 20 November 2011] Rohini Upadhyay.org/branding/mcdonalds-branding-and-marketingstrategies/ [Accessed 21 November 2011] McDonald’s Corporation.Referencing McDonald’s Corporation.gov/r/pa/ei/bgn/2777.htm [Accessed 21 November 2011] Brand Symphony. McDonalds Branding and Marketing Strategies. 2011. Distribution Strategy of McDonald [online] Available at: http://www.com. 2011. Bureau of Public Affairs.com. Background Note: Malaysia [online] Available at: http://www.asp [Accessed 22 November 2011] 11 .my/highlights/weekdaysbreakfastspecial.com. [blog] 8 August 2010.com/forums/elements-logistics/217308distribution-strategy-mcdonald. 2011.
KFC’s Breakfast Menu [online] Available at: http://www.kfc.my/breakfast-menu. Porter’s Five Forces [online] Available at: http://www. 2011.netmba.com/doc/64156017/McDonalds-08-JIBED-Vol-3-No-4- [Accessed 30 November 2011] 12 .com/strategy/porter. 2011.com/marketing/mix/ [Accessed 23 November 2011] QuickMBA.burgerking. 2010. 2011.php [Accessed 22 November 2011] Burger King Corporation.com/doc/28290117/Mcdonalds-Mini-Report [Accessed 24 November 2011] Demetris Vrontis and Pavlos Pavlou.com.scribd.scribd. McDonald’s Mini Report [online] Available at: http://www. The Marketing Mix [online] Available at: http://www. What’s Hot Promotions [online] Available at: http://www. The external environment and its effect on strategic marketing planning: a case study for McDonald’s [online] Available at: With-Pavlou-P http://www.php [Accessed 22 November 2011] NetMBA. 2008.quickmba.com.my/whats_hot/promotions/default.KFC Holding. 2011.shtml [Accessed 24 November 2011] Kashan Pirzada.
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