McDonald’s Marketing Signature

Every year, the fast food industry is getting more and more popular. At the same time, the cult of healthy food attracts people a lot. Despite the fast pace of life, people want to eat healthy food. Fast food companies are forced to change and adapt to the desires of their consumers. One might consider the example of McDonald’s, especially the possibility and effectiveness of the company’s marketing strategy to introduce a line of healthy food into the world-famous industry of fast food.

McDonald’s operates in the field of catering, and its main activity is the management and franchise of fast food restaurants under its own brand. Such restaurants offer a varied but limited menu, and the company is present in over 100 countries around the world (McDonald’s History, 2018). The competitors in the coffee side of the fast food category of the company are Dunkin’ Donuts and Starbucks. The purpose of the research is to introduce a new product into the market and understand how it may affect the corporation’s position in the market.

Company Description

McDonald’s is the world leader in the food industry, and it has more than 36,000 establishments in over 100 countries of the world, which daily serve about 70 million visitors (McDonald’s History, 2018). Today, McDonald’s is present in almost any city with a population of around a million individuals or more. McDonald’s business is based on two areas – branded restaurants and franchises. The franchisees account for up to 80% of the total number of restaurants (McDonald’s Corporation, 2018). Such disproportion is explained by the fact that the company receives all the proceeds from its own establishments and the business model, which is the way of work of almost any restaurant chain.

The success of the concept lies in fast customer service, low prices, and high turnover. The history of the sign “Mc” is directly related to the company’s history of the applicant and, in particular, symbolizes the name of one of its founders – Maurice McDonald. On May 15, 1940, the brothers Maurice and Richard MacDonald, with their loved ones, known as Mack and Dick, opened their first institution called “McDonald’s Bar B-Q “in the town of Bernardino, California (USA). Starting from this date, the sign “Mc” is used in the name of the first restaurant of brothers Mac and Dick McDonalds. In 1955, McDonald’s Company was established. Its first institution opened on April 15, 1955, in the town of Des Plains (Illinois, USA). At the end of 1956, the commodity turnover of 14 establishments amounted to 1.2 million US dollars. In four years, 228 establishments with a turnover of 37.6 million US dollars were opened. In 1965, the media source, Better Investing Magazine (USA), called McDonald’s the most popular company. In 1954, Ray Kroc acquired from the McDonald brothers the right to act as an exclusive franchising agent. In 1985, McDonald’s company was included in the list of “Dow Jones industrial “. All in all, the company was developed through the years, and even now, it is aimed to introduce something new to its clients.

McDonald’s SWOT Analysis

Competitive Analysis of the Company

McDonald’s marketing strategy has evolved over the years in an effort to compete with other food service establishments, such as Starbucks and Dunkin’ Donuts. All these entities offer expedient and opportune service of a desirable and healthy food selection, for example, salads, sandwiches, coffee, as well as other drinks.

While Starbucks’ focus is on coffee, their segmented marketing approach places emphasis on the upscale urban audience, hence vying for those consumers who are seeking ease and solace over convenience (Mourdoukoutas, 2013). Dunkin’ Donuts has also begun to target the trend-seeking and trend-setting segments with premium coffee drinks as well as a selection of nutritionally dense breakfast items. Dunkin’ Donuts restaurants also aim at those consumers that are price sensitive, thus seeking advantage of economic conditions. Each of the three restaurants offers myriad locations. Thus, McDonald’s has over 36,000 restaurants (McDonald’s Corporation, 2018); Starbucks has over 24,000 restaurants (Starbucks Heritage, 2018); and Dunkin’ Donuts owns more than 12,000 establishments in different nations (Dunkin’ Donuts, 2018). Each of the three restaurants is a breakfast food rival, with McDonald’s escalating its McCafe positioning in this venue. Both McDonald’s and Dunkin’ Donuts are perceived as being price-conscious as opposed to Starbucks, which is seen as the costliest among the three of them. According to Golde (2009), McDonald’s is not defined as the “IT” place to hang out and surf the net, but it does sell good coffee and offers the appeal of value and speed. Finally, Dunkin’ Donuts continues to appeal to the middle class and serves more rural markets that are not cost-advantageous enough for Starbucks to enter.

McDonald’s has high competitiveness due to its working schedule, availability of Mac Drive, and use of natural and high-quality products. However, a significant influence on the competitiveness of McDonald’s restaurant chain is the confidence of the population that the company uses a variety of chemical food additives (flavors, stabilizers, preservatives, dyes, etc.). Thus, McDonald’s is often shown as a negative example of globalization. However, comparing McDonald’s, Starbucks, as well as Dunkin’ Donuts, McDonald’s benefits from advertising and diversified offers. The company is the most profitable organization on the market.

McDonald’s has the biggest market sales volume among companies in the fast food industry at the rate of $36 billion. Starbucks is in second place with the volume of sales equal to $15 billion. Dunkin’ Donuts received only $8 billion from sales in 2016.

Current Target Segments

The current target audience includes children and parents with children, office workers, students, as well as car owners. Every visit to the restaurant for children should be fabulous, and the company completes this task. Children really like McDonald’s. Office workers are regular customers of the restaurant; during the lunch break, a person wants tasty, quick, and not expensive food. At the moment, the company is developing the direction of delivery of the combined meals and most of the restaurant’s assortment. The students are active young people who want to communicate as well as surf the internet during their break or free time. Car owners, people who, above all, appreciate the speed of service, often use Mac Drive, which is popular and, above all, effective at the expense of 2-3 people who take an order on the street and send an order with an assigned number to a common console using the latest technologies.

Current Marketing Strategy

The marketing strategy of McDonald’s was outstanding since the beginning of its operations. The company had developed a unique image in the mind of consumers; the company used to develop alternate positioning strategies for the different target markets in comparison to other competitors. McDonald’s has become accustomed to using various marketing methods in its marketing campaign as well as various types of advertising, including expensive advertising, such as billboards, signs and advertising at bus stops, as well as television advertising. The company also acts as a sponsor of different sports events and also uses the local advertising channels of the particular place.

New Product Development

Product Information

In order to remain competitive, the company must constantly develop and diversify. In this way, it is proposed to introduce a new line of gluten-free muffins with blueberries. Such a strategy might allow the company to expand the target audience, thus attracting completely new consumers through the introduction of healthy food. According to the latest data provided by Ernst & Young (2015), there is a high demand for GF products in Sweden, Norway, Denmark, and Finland. In particular, 93% of Swedes surveyed said they are willing to pay more for organic food (Ernst & Young, 2015). Therefore, adding a GF cake to the company’s production line would be a sensible solution. The visual presentation of a product is shown below (see figure 2).

The introduction of a new muffin will attract customers who have previously avoided such establishments, but with the advent of a healthy menu, the situation may change dramatically. Such a product will allow the company to prove itself as socially responsible and continue to develop similar products. Apart from that, this is a great idea since GF muffins become a complementary product to McDonald’s McCafe lineup. It is something that McDonald’s is really pushing in its ongoing battle for market share with Dunkin’ Donuts and Starbucks in the coffee side of the fast food category.

Targeting and Positioning Strategy

Targeting strategy is to attract new potential consumers, so-called “green” and coffee lovers, which will include people on a GF diet, men and women with a healthy lifestyle, children whose parents control their diet, and consumers with high cholesterol. “Greens” are individuals who are fighting for the purity of the environment, and the menu of McDonald’s must include all sorts of oxygen cocktails and healthy food for such buyers. Coffee lovers are people who appreciate the taste and quality of this drink. The good marketing strategy, for example, can be the action-tasting: while buying one big cup of coffee, as a gift, a consumer can get coffee beans. He or she may try them at home to determine whether they like them or not. It is an advertisement that might be very effective in a restaurant due to the consumer’s turnover.

Strategic positioning includes moving towards a healthy menu, adding healthy options, and refocusing on health food as well as price-conscious customers. The company might also concentrate on quality and cleanliness via the strong marketing campaign. An introduction of a new product – gluten-free muffin with blueberries – will serve as the beginning of a new marketing campaign with the possible further expansion into the market of gluten-free products.

Brief Overview of the Marketing Mix for the New Product Offering

The factors that increase the chance of success of a new product in the market include the uniqueness of the offer and superiority over the goods of competitors, the emphasis on the distinctive properties of the product, consumer research, clear customer segmentation, and target-oriented marketing, trial marketing before large-scale release of goods, as well as adaptation of technologies to the requirements of the market, optimization of production, and new technologies. In the current economic conditions, in order to maintain their position in the market, the organizations preserve the profitability of their business. More and more often, they have to resort to developing new markets, thus searching for new solutions and creating new products. In order for these events to succeed, a clear understanding of the mechanisms, problems, and methods of launching a new product in the market is necessary. The marketing mix consists in determining the product, its price, potential consumers, as well as the place of sale and the means of promotion. The new product offering is gluten-free muffins with blueberries, their price will be higher than the price for standard muffins, and potential consumers will include people on a GF diet, men and women with a healthy lifestyle, children whose parents control their diet, and consumers with high cholesterol. The product will be sold in McDonald’s restaurants as well as via the Internet. GF muffins will become an addition to McCafe product line, and product promotion consists in placing billboards and signage with the image of a new product as well as adding photos to the menu on the website and directly in the fast food restaurants. Apart from that, there is an opportunity to promote the product through television, which is an excellent means of product promotion.

Sample Promotional Material (Advertisement) for the New Product

As market conditions change, the key factors for a company’s success also vary. lf earlier the leading positions were held by companies that produced goods or provided better quality services, now market leaders are flexible companies that can quickly respond to changing customer demands, the emergence of new technologies, and the actions of competitors. The success of a company directly depends on how successfully it enters the market with a new offer, introduces a new product, and creates new services.

McDonald’s presents a new line of gluten-free muffins: healthy food for reasonable people. An example of advertising is presented below; such advertising image must attract a new target audience and can be applied to billboards and signage.

How the New Product Offering Improves the SWOT

The new product offer contains a high potential for the further development of this line of healthy food. Of course, the new product influences the company’s strategy; there are changes in the SWOT analysis. In this way, the new product allows to improve the current SWOT analysis. As described in the SWOT analysis, the company really positions itself as socially responsible and is constantly working to improve the quality of ingredients, thus gradually introducing more useful products into its menu. The organization takes advantage of opportunities for innovation and creates new products. The introduction of a new product allows us to get rid of such weaknesses as the lack of innovative products. In this way, the emergence of advertising about gluten-free muffins will surely attract the attention of adults, and thus, McDonald’s advertising will be more interested in a larger target audience than it was before. Unfortunately, the introduction of a new product cannot affect currency fluctuations as well as reduce the cost of expensive advertising, but as for health problems from McDonald’s unhealthy food, the gradual introduction of healthy food will help forget about this problem. Finally, with regards to the pricing policy of competitors, the new product cannot stop the price reduction by competitors, but it can attract customers from the competitive companies, thereby increasing the income of McDonald’s.

How the New Product Offering Effectively Creates New Targets

The offer of a new product – a gluten-free muffin with blueberries – carries with it great potential for the development of a whole segment of healthy food in the fast food chain. As previously described, studies have been conducted to show that gluten-free products are gaining popularity in some countries, which, in turn, suggests the potential for the gradual popularity of gluten-free products around the world. The introduction of a gluten-free muffin really effectively creates new goals to meet the health needs of people. In this way, after the presentation of the new muffin, the company can think about the development of new gluten-free products as well as the gradual transition of the brand to the content of higher quality and useful ingredients.

How the New Product Offering Impacts the Firm’s Overall Strategy

The new product requires large expenditures on positioning and advertising to gain market share. The next-generation product or advanced product is most often manufactured by the same manufacturer, but the product has improved properties compared to the previous version. The overall strategy of the company changes and becomes aimed at adding healthy options as well as working with price-conscious customers. An introduction of a new product – a gluten-free muffin with blueberries – will serve as the beginning of a new marketing campaign with the possible further expansion into the market of gluten-free products. The strategic priorities of the company include ensuring stable growth, perfect customer service, maintaining the status of an efficient and high-quality, and socially responsible ecological food producer, staff development on all levels, organizing the exchange of experience between departments in different countries, constant improving the concept of fast food, encouraging the development of new dishes, innovations in equipment, marketing, service organization, and technology.

Conclusion

McDonald’s is the world leader in the food industry and has more than 36,000 establishments in over 100 countries of the world, which daily serve about 70 million visitors. Despite the fact that the company has many competitors, McDonald’s is the most profitable organization in the market. Today, McDonald’s is present in any city whose population is close to a million. McDonald’s business is based on two areas – branded restaurants and franchises. The main consumers of the company’s products are children and young people. However, with the introduction of a new line of healthy products, the target audience can increase significantly – it becomes possible to attract older individuals who care for their health and the health of their families, thus advocating a healthy lifestyle and proper nutrition. Developing new products, the targeting strategy changes and becomes aimed to attract new potential consumers, so-called “green” and coffee lovers, which will include people on a GF diet, men and women with a healthy lifestyle, children whose parents control their diet, as well as consumers with high cholesterol.

The main goal of McDonald’s company is to satisfy the wishes of each visitor as well as attract new segments of visitors. The introduction of a new product allows for improvement SWOT analysis of McDonald’s company. Thus, such a marketing strategy has more advantages than disadvantages in the form of higher advertising costs and the promotion of new gluten-free products for the company.