McDonald's Marketing Plan

Abstract

This paper explores a strategic marketing plan for the global fast food chain McDonalds with a concentration on their U.S. based franchises. This paper includes a SWAT analysis, which focuses on the opportunities and threats faced by the company, as well as the marketing objectives through the management of product, price, promotion, physical distribution, and people. Alternative marketing strategies are considered while evaluating the current strategies, as well as a final recommendation. This paper examines McDonald's external and internal customer analysis, competitor analysis, market and submarket analysis, environmental analysis, internal analysis, as well as strategy and organizational development.

McDonald's Marketing Plan

McDonalds first started serving hamburgers in 1955, in San Bernardino, California and the company hasn't looked back. With restaurants located in 119 countries around the world, McDonalds is the largest chain of hamburger fast food restaurants in the world. Ray Kroc, who was the founder of the McDonald's Corporation, created a restaurant system that was built on consistency. According to the McDonald's website, Kroc wanted to serve burgers, buns, fries and beverages that tasted the same in Alaska as they did in Alabama. The McDonald's Corporation had followed through on Kroc's consistency pledge across the globe, as well as his core McDonald's principles of quality, service, cleanliness and value.

External & Customer Analysis

Major segments of McDonalds include demographic segments as well as geographic segments with McDonalds being a global company. McDonald's demographic segments include customer's sex, ethnicity, income, and family size. McDonald's geographic segments include country, state, and type of area. Geographic segments play an important role in marketing for McDonalds. The company markets differently in regards to country, with different menu items in different countries. McDonalds also has different menu items on their menus in different states across the entire United States with regards to the area being urban or rural.

Identifying customer motivations is key for a global fast food chain such as McDonalds. Customer motivations in fast food chains are distinct and differ by segment. Each customer group has a different set of driving motivations for choosing which fast food chain they will eat at. Customer groups can be broken down into groups such as value restaurant seekers, healthier choice restaurant seekers, convenience restaurant seekers, and whole experience restaurant seekers. Value customers are customers looking to get the most food for the least amount of money. McDonalds have cornered this group by offering a value menu with choices for around $1. Healthier choice customers are looking for menu choices that taste good, and are nutritional. McDonalds has taken a step closer to obtaining more of these customers by offering healthier choices on their menus that taste good. Convenience customers are customers who want very fast service because of time restraints. They still require quality food, but want it faster. McDonalds has attracted these customers by offering faster drive thru service, as well as quick preparation time. McDonald's many locations have also played a part in attracting these customers as well. Customers who value the whole restaurant experience are a group who are enjoy eating inside the restaurant, enjoy many choices on the menu, and enjoy amenities such as a playground or other customer attracting device. McDonalds has done very well with this group by having a playground inside their restaurants for children, or leather couches for customers who enjoy reading a newspaper while enjoying a cup of coffee.

The unmet needs of McDonald's customers are in the nutritional realm. Customers, who enjoy the convenience of the McDonald's restaurants because of the restaurant's location and the customer's time restraints, are looking for healthier, nutritional choices on the McDonald's menu than what is currently offered. Currently, McDonalds has started serving a salad line as well as a grilled chicken sandwich that offers choices that are healthier than menus of the past, but customers are looking for McDonalds to expand their menus with more choices. McDonalds has done their part in listening to their customers by adding oatmeal to their menu as well as offering vegetables choices instead of fries in their Happy Meal options. McDonalds needs to offer healthier options to some of the core fattening items to attract more customers looking to eat healthier, but not loose the customers who don't value nutrition by completely cutting them off the menu.

Competitor Analysis

With 160,000 fast food restaurants in America today alone, that serve 50 million Americans daily, the number of McDonald's competitors is very large. Fast food restaurants are all over the world, and are popping up at alarming numbers. Potential competitors are gaining in population for McDonalds as well. In the United States, McDonald's main competitors are Burger King, Wendy's, and now Starbucks. Potential competitors include Little Caesars, Dominos, Subway, and the Yum Food Group. Fast food strategic groups are national chain brands, such as McDonalds and Burger King, and local fast food restaurants that provide quick meal options at a low price.

McDonald's main competition comes from Burger King, Wendy's, and Starbucks now that McDonalds has entered the coffee house business. McDonald's revenues of $22.7 billion lead the way in 2010, while Starbucks, which had $10.7 billion in revenues last year finished second. McDonalds has extended their menus by adding a McCafe line that is competing with coffeehouses, such as Starbucks. McDonald's other competition remains in the hamburger fast food business, where Wendy's finished with $3.4 billion in revenues, and Burger King had $2.5 billion in revenues in 2010. With the economy picking up slightly across the country, these 4 chains have a good outlook on growth trends for 2011.

Potential competitors come from other restaurants that serve customers at prices that are comparable to McDonalds, as well as service and quality. The pizza chains that are potential competitors to McDonalds are Little Caesars and Dominos. Both chains offer food quickly, and relatively comparable in price that families are consuming. Subway has also fallen into the potential competitor's category for McDonalds with their strong marketing campaign for their $5 foot long meal deal that has