Summary of the company’s operations/background
“McDonald's” is one of the largest fast-food restaurant chains in the world. The company has about 40,000 branches worldwide, most of which operate through the purchase of the brand's royalties. In 1940, Richard and Maurice operated the first McDonald's restaurant in San Bernardino, California. McDonald's began a major development in the 1960s (Vignali, 2001).
The main products that McDonald's offers include hamburgers, cheeseburgers, french-fries, breakfast varieties, soft drinks, milk, desserts, etc. (Gilbert, 2008, p29). In response to the obesity trend in Western countries and in the face of criticism of the health of its products, the company has also included packaged salads and fruits in its menu. In the competitive fast-food world, KFC, Starbucks, Burger King, Subway, Pizza Hut, Wendy's, Taco Bell are McDonald's top competitors. Among the competitors, the privately owned Burger King is McDonald's closest competitor (Pafitis, 2020).
McDonald's changed its list in the 1980s to meet the different needs of its customers. McDonald's global units increased from 3,600 in 1991 to more than 11,000 by 1998, reflecting the company's growth and competitiveness. Although, the company experienced low-cost meal sales during the 2008-2009 recession, in 2012 it was able to reach $27.56 billion again (Vignali, 2001). As Lemon (2020) states, although the brand also experienced difficult and declining times, proper management in the “4Ps” strategy helped keep McDonald's from deteriorating over time and still being one of the most popular fast foods around the world.
McDonald's brand image is that of family, joy, love, and youth. With family focused marketing, McDonald's has been able to connect with a wider base across generations, unlike other competitors such as Burger King, which focuses on youth marketing. Its key competitive advantages have included nutrition, convenience, affordability, innovation, quality, hygiene, and value-added services (Elsevier, 2012, p1056). According to (Gilbert, 2008, p34), effective marketing using the 4P elements increases sales and creative advertising has played an important role in McDonald's success to date. That is why at this point I am going to analyze the marketing mix of McDonald's. The reason for choosing this brand is that the brand uses a unique marketing combination that relies on the quality of the product offered, store space, quality of service, proper advertising, and other parameters that make it stand out from other competitors to this day.
Detailed analysis of the company’s 4Ps
The mixed marketing model or the "4Ps" is a powerful tool that can help marketers in defining marketing strategies and it can be claimed that most marketing plans and decisions are made based on it (Dominici, 2009, p18). In other words, the success or failure of any business depends on the degree of mastery of each marketer in the expert examination of these elements. I agree with Didner (2019) that mentioned, for those who want to produce or offer a product or service, and even those who are first or halfway in any business, it is important to carefully consider these four effective features. American marketing professor E. Jerome McCarthy first introduced these four wonder elements (product, price, place, promotion) in the 1960s (Hisrich & Ramadani, 2017, p87). In general, since these four factors are under the control of management, it is possible to achieve a higher level of satisfaction among customers by making changes in each of them, and consequently increase brand ranking in the competitive market.
Product
A product refers to the physical goods or intangible services provided by any company or institute and is known as the heart of marketing. For a company to be successful, the product must have a unique selling proposition and be difficult for others to copy (Rahmani, Emamisaleh & Yadegari, 2015). McDonald's is always sensitive to a set of factors such as speed, quality, design, packaging, and has standard products tailored to local conditions. The company became known primarily for its burgers and gradually expanded its product line. Among the most popular McDonald's menu lists are Snack Wrap, Happy Meal, Egg McMuffin, Baked Apple Pie, Chicken McNuggets, Premium Salads, Double Cheeseburger, McGriddles Breakfast Sandwich, etc. (Meyer, 2020). Other companies can compete with McDonald’s in various areas, however, in terms of product competition, McDonald's french-fries are better than any other competitor.
One of the most important policies of McDonald's that distinguish it from other competitors like KFC and Burger King is to present its products in all the countries under its coverage in accordance with the wishes, culture, and words of the customers. Each country has its own unique menu items, but there are few classics in any of the world's menus. These include Big Mac, Quarter Pounder, French Fries, and Happy Meal (Lemon, 2020). As an example, the McDonald's menu in India is different from menus in other countries. The company has removed beef, mutton, and hamburgers from its list in India, offering a vegetarian menu and adding Chicken McNuggets and Chicken Maharaja Mac to its list (Elsevier,2012,p1057). As a result, it seems that McDonald's in the field of product, by looking at the 4Ps in a proper way and with accurate knowledge, considers these factors in marketing and customer attraction.
“McDonald’s product mix has the following main product lines”: (Meyer, 2020).
· Hamburgers and sandwiches
· Chicken and fish
· Salads
· Snacks and sides
· Beverages
· Desserts and shakes
Price
Product pricing is a revenue-generating component of the marketing mix and has a direct impact on a company's demand and profitability, which is why it is so critical and decisive. Pricing for a product is a sensitive and difficult task (Dominici, 2009, p22). If the product has a low price, consumers may consider it as a substandard commodity. On the other hand, if the price of the product is too high, consumers may consider it expensive and unnecessary. In marketing logic, as long as you are not a luxury brand, it will be difficult for you to sell expensive goods (Didner, 2019). According to Meyer (2020), McDonald's operates differently in pricing in each country. Investigates factors such as demand for the product, production costs, consumer solvency, competitors' price for the same product, government restrictions, etc., and creates a price that satisfies customer demand.
The enterprise uses a mixture of the following pricing strategies:
· Bundle price strategy
· Psychological pricing strategy
In the package pricing strategy, McDonald's offers packaged meals at discounted prices compared to buying each product individually. In psychological pricing, the company uses far more affordable prices, such as $.99, instead of raising it to the nearest dollar (Vignali, 2001). McDonald's competitor, Burger King, uses the same strategies in pricing its products. As a low-cost provider, McDonald's offers products that are fairly cheaper compared to competitors like Arby's. This "secondary generic" strategy involves developing the business and its products to make them distinctive from competitors. Therefore, McDonald's has been able to attract the middle and lower classes of society among the customers by offering meals at various and reasonable prices. Also according to the pricing policy, McDonald's encourages its customers to buy with the slogan "Start your day right with the $1, 2$, 3$."(Pafitis, 2020).
A few examples of prices offered by McDonald’s as Lemon (2020) mentioned:
· Sausage, Egg & Cheese McGriddles – Meal $4.49
· Sausage McGriddles – Meal $3.49
· Sausage, Egg & Cheese McGriddles $3.29
· Sausage McGriddles $2.79
· McPick 2 $2
· Bacon Cheddar McChicken $ 1.00
· McDouble $ 1.00
· Fruit'n Yogurt Parfait $ 1.00
· Buffalo Ranch McChicken $ 1.00
Place
The place is one of the most important elements in 4Ps marketing and refers to product distribution. Product availability encourages customers to buy. For instance, a customer may like a product and want to pay for it, but if they do not have access to the product, they will not buy it. In fact, a chain of individuals and companies such as distributors, wholesalers, and retailers work together to provide easy access for customers (Rahmani et al., 2015). In this part, every marketer must answer some basic questions. How does a customer find and buy what he or she wants to sell? Is it sold in retail stores or exclusively online? How are distribution channels, store locations, and logistics and logistics issues resolved? Etc. (Hisrich&Ramadani, 2017, p93).
An interesting statistic is that in the United States, almost 50% of McDonald's branches are three minutes apart, and most of them are located in city centers, close to busy housing areas or schools. This spatial positioning and calculated dispersion of branches reflect deep thought and real consideration of the element of location and distribution in giving a good feeling to the customer (Gilbert, 2008, p33). Therefore, McDonald's can ensure that its product is available to customers in the right place, at the right time, and in the right quantity.
The main places through which McDonald's distributes its products according to Meyer (2020) are:
· Restaurants
· Kiosks
· McDonald's mobile apps
· Website and post app
McDonald's restaurants are where the company has the most revenue. McDonald's ranks second in the number of restaurants known after Subway, ahead of Starbucks, KFC and Burger King (Chepkemoi, 2019). Kiosks are usually temporary, such as those used in professional sports and other seasonal competitions. McDonald's has also begun offering internet services at select locations to make it easier for customers to access. The company's mobile applications are virtual places where customers can access the company's product information and place their orders through the “Postmates” website and mobile application (Lemon, 2020). According to Paphits (2020), although other McDonald's competitors such as Burger King and Starbucks have been more active in using Facebook, Twitter and Instagram, but McDonald’s is trying to use up-to-date facilities to maintain the goal of providing quality food and service in an inviting environment with fast speed and easy access service. This has allowed McDonald's to remain competitive in the fast food retail market.
Promotion
Promotion is the process of informing, persuading and impressing the consumer by the marketer so that the customer can finally make the choice to buy the required product. This element defines the marketing mix of tactics that businesses use to communicate with customers and provides consumers with information about how the product is accessed (Dominici, 2009, p24). As Meyer (2020) believes, “Among 4Ps, this variable focuses on marketing communications with target customers”.
McDonald uses the following methods in its promotional mix: (Meyer, 2020).
· Advertising (Most Important)
· Sales advertising
· Public relations
· Direct marketing
Among these methods, which are ranked according to their importance in McDonald's marketing, advertising has a special portion. The company like other competitors uses television, radio, newspapers, magazines and social media for its advertising (Vignali, 2001). They have also started using billboards and supporting sporting events such as the Olympics, a move that sets the company apart from other well-known competitors. On the other hand, McDonald's uses sales advertising to attract more customers to the company's restaurants. The most common sales ad McDonald’s runs is their Happy Meal. The content of the food has remained the same over the years, but the toy is always changing. The toy offered in Happy Meal is usually related to a movie or event that was popular at the time (Pafitis, 2020).
McDonald's also offers special discount coupons as a way to attract more customers for some products and product packages. In addition, the company's public relations activities, while creating an atmosphere of goodwill and community support, also help increase brand value. Examples include “Ronald McDonald's home charities” and “McDonald's Global Best of Green environmental program” (Meyer, 2020). Burger King, like McDonald's, uses sales promotions and public relations in marketing but with different tactics. In direct marketing, McDonald's cares about the customers who are most likely to be most interested in its products. For example, McDonald's may send a letter to regular and enthusiastic customers about a future product. This connection can also include distributing or delivering direct promotional materials by mail, notification by telephone, or through a coupon system, or even door-to-door (Lemon, 2020). In general, it can be concluded that no success was unreasonable, and if McDonald's was successful so far, it used the right advertising tools.
Conclusion
In conclusion, Marketing Mix (4Ps) is a useful and well-known tool in the field of marketing. This tool helps business owners (large or small) to control various factors such as product quality, price, type of promotion, and product distribution by using a marketing strategy. Therefore, in one sentence we can say that the 4Ps model means offering the best product to the customer at the best price in the best place and in the best way. According to McDonald's 4Ps analysis, it can be seen that despite the criticism in the fast-food industry, McDonald's has been growing for decades, and this shows the correct use of the 4Ps strategy. One of the drawbacks of fast-food restaurants in which will have to be considered in their future marketing strategy is that they are unhealthy. Although McDonald's efforts to date to change its list have been effective in maintaining a competitive position in the market, experts believe that in the future, fast food companies should look for a way to attract customers by offering healthy foods.
References
Chepkemoi, J. (2019). The World's Largest Fast Food Restaurant Chains. World atlas. Retrieved June 10, 2019, from www.worldatlas.com/articles/the-world-s-largest-fast-food-restaurant-chains.html
Dominici, G. (2009). From marketing mix to e-marketing mix: A literature overview and classification. International Journal of Business and Management, 4(9), pp. 17-24.
Didner, P. (2019). The 4 P’s of Global Content Marketing. Content Promotion News and Insights. Retrieved Jul 22, 2019, from www.relevance.com/the-4-ps-of-global-content-marketing/
Elsevier, L. (2012). A Comparative Study on International Marketing Mix in China and India: The Case Of McDonald's. JIBES University, Jakar: Volume 65, 3 Dec 2012, Pages 1054-1059.
Gilbert, S. (2008). The Story of McDonald's. The Creative Company: pp. 27-35.
Hisrich, R. D., & Ramadani, V. (2017). Entrepreneurial Marketing Mix. Springer International Publishing. In Effective Entrepreneurial Management (pp. 75-99).
Lemon, M. (2020). McDonald’s Marketing Strategy: Staying Transparent While under Fire. Special Projects: Post Funnel by Optimove. Retrieved from
Meyer, P. (2020). McDonald’s Marketing Mix (4Ps) Analysis. Panmore Institute. Retrieved Sep 20, 2020, from http://panmore.com/mcdonalds-marketing-mix-4ps-analysis
Pafitis, E. (2020). McDonald’s Marketing Strategy: What Your Company Can Learn. Marketing & Branding. Retrieved from https://www.startingbusiness.com/blog/marketing-strategy-mcdonalds
Rahmani, K., Emamisaleh, K., & Yadegari, R. (2015). Quality function deployment and new product , Development with a focus on marketing mix 4P model. Asian Journal of Research in Marketing, 4(2), 98-108.
Vignali, C. (2001). McDonald’s: “think global, act local” – the marketing mix. University “VITEZ” Travnik, British Food Journal 103(2):97-111.