Subject:

International Marketing Management

Assignment No 1:
International Marketing Strategy

Submitted to:
Prof. Rajnish Shankhdhar

Submitted by:
Richa Vaish
Shipra Singh

Class:
MBA (Gen) Sec-B
Semester 2
 Mc Donald’s

VISION

To be the best and leading fast food provider around the globe.

MISSION

“Mc Donald’s vision is to be the world’s best quick service restaurant

experience. Being the best means providing outstanding quality, service,
cleanliness and value so that we make every customer in every restaurant
smile.”

History
The McDonald's concept was introduced in Southern California by Dick and Mac
McDonald of Manchester, New Hampshire. It was modified and expanded by their
business partner, Ray Kroc, of Oak Park, Illinois, who later bought out the business
interests of the McDonald's brothers in the concept and went on to found McDonald's
Corporation. The business began in 1940, their introduction of the "Speedee Service
System" in 1948 established the principles of the modern fast-food restaurant. The
original mascot of McDonald's was a man with a chef's hat on top of a hamburger shaped
head whose name was "Speedee." Speedee was eventually replaced with Ronald
McDonald in 1963. Believing that the McDonald formula was a ticket to success, Kroc
suggested that they franchise their restaurants throughout the country. When they
hesitated to take on this additional burden, Kroc volunteered to do it for them. He
returned to his home outside of Chicago with rights to set up McDonald's restaurants
throughout the country, except in a handful of territories in California and Arizona
already licensed by the McDonald brothers. Kroc's first McDonald's restaurant opened in
Des Plaines, Illinois, near Chicago, on April 15, 1955--the same year that Kroc
incorporated his company as McDonald's Corporation. As with any new venture, Kroc
encountered a number of hurdles. The first was adapting the McDonald's building design
to a northern climate. A basement had to be installed to house a furnace, and adequate
ventilation was difficult, as exhaust fans sucked out warm air in the winter and cool air in
the summer.

Most frustrating of all, however, was Kroc's initial failure to reproduce the
McDonalds' delicious french fries. When Kroc and his crew duplicated the brothers'
method-- leaving just a little peel for flavor, cutting the potatoes into shoestrings, and
rinsing the strips in cold water—the fries turned into mush. After repeated telephone
conversations with the McDonald brothers and several consultations with the Potato and
Onion Association, Kroc pinpointed the cause of the soggy spuds. The McDonald
brothers stored their potatoes outside in wire bins, and the warm California breeze dried
them out and cured them, slowly turning the sugars into starch. In order to reproduce the
superior taste of these potatoes, Kroc devised a system using an electric fan to dry the
potatoes in a similar way. He also experimented with a blanching process. Within three
months he had a french fry that was, in his opinion, slightly superior in taste to the
McDonald brothers' fries. Once the Des Plaines restaurant was operational, Kroc sought
franchisees for his McDonald's chain. The first snag came quickly. In 1956 he discovered
that the McDonald brothers had licensed the franchise rights for Cook County, Illinois
(home of Chicago and many of its suburbs) to the Frejlack Ice Cream Company. Kroc
was incensed that the McDonalds had not informed him of this arrangement. He
purchased the rights back for $25,000--five times what the Frejlacks had originally paid--
and pressed forward.

Kroc decided early on that it was best to first establish the restaurants and then to
franchise them out, so that he could control the uniformity of the stores. Early
McDonald's restaurants were situated in the suburbs. Corner lots were usually in greater
demand because gas stations and shops competed for them, but Kroc preferred lots in the
middle of blocks to accommodate his U-shaped parking lots. Since these lots were
cheaper, Kroc could give franchisees a price break.

McDonald's grew slowly for its first three years; by 1958 there were 34
restaurants. In 1959, however, Kroc opened 67 new restaurants, bringing the total to more
than 100.

Kroc had decided at the outset that McDonald's would not be a supplier to its
franchisees--his background in sales warned him that such an arrangement could lead to
lower quality for the sake of higher profits. He also had determined that the company
should at no time own more than 30 percent of all McDonald's restaurants. He knew,
however, that his success depended upon his franchisees' success, and he was determined
to help them in any way that he could.
 In 1960 the McDonald's advertising campaign "Look for the Golden Arches" gave
sales a big boost. Kroc believed that advertising was an investment that would in the end
come back many times over, and advertising has always played a key role in the
development of the McDonald's Corporation--indeed, McDonald's ads have been some of
the most identifiable over the years. In 1962 McDonald's replaced its "Speedee" the
hamburger man symbol with its now world-famous Golden Arches logo. A year later, the
company sold its billionth hamburger and introduced Ronald McDonald, a red-haired
clown with particular appeal to children.

The present corporation dates its founding to the opening of a franchised

restaurant by Ray Kroc, in Des Plaines, Illinois on April 15, 1955 , the ninth McDonald's
restaurant overall. Kroc later purchased the McDonald brothers' equity in the company
and led its worldwide expansion and the company became listed on the public stock
markets in 1965. Kroc was also noted for aggressive business practices, compelling the
McDonald's brothers to leave the fast food industry. The McDonald's brothers and Kroc
feuded over control of the business, as documented in both Kroc's autobiography and in
the McDonald brothers' autobiography. The site of the McDonald brothers' original
restaurant is now a monument. The menu was simple: hamburgers, cheeseburgers, french
fries, shakes, soft drinks, and apple pie. The carhops were eliminated to make
McDonald's a self-serve operation, and there were no tables to sit at, no jukebox, and no
telephone. As a result, McDonald's attracted families rather than teenagers. Perhaps the
most impressive aspect of the restaurant was the efficiency with which the McDonald's
workers did their jobs. Mac and Dick McDonald had taken great care in setting up their
kitchen. Each worker's steps had been carefully choreographed, like an assembly line, to
ensure maximum efficiency. The savings in preparation time, and the resulting increase
in volume, allowed the McDonalds to lower the price of a hamburger from 30 cents to 15
cents.

Believing that the McDonald formula was a ticket to success, Kroc suggested that
they franchise their restaurants throughout the country. When they hesitated to take on
this additional burden, Kroc volunteered to do it for them. He returned to his home
outside of Chicago with rights to set up McDonald's restaurants throughout the country,
except in a handful of territories in California and Arizona already licensed by the
McDonald Brothers. With the expansion of McDonald's into many international markets,
the company has become a symbol of globalization and the spread of the American way
of life. Its prominence has also made it a frequent topic of public debates about obesity,
corporate ethics and consumer responsibility.

Facts and figures

McDonald's restaurants are found in 119 countries and territories around the
world and serve nearly 47 million customers each day. McDonald's operates over 31,000
restaurants worldwide, employing more than 1.5 million people. The company owned a
majority stake in Chipotle Mexican Grill until completing its divestment in October 2006.
Until December 2003, it also owned Donatos Pizza. On August 27, 2007, McDonald's
sold Boston Market to Sun Capital Partners.

Products

McDonald's predominantly sells hamburgers, various types of chicken

sandwiches and products, French fries, soft drinks, breakfast items, and desserts.

In most markets, McDonald's offers salads and vegetarian items, wraps and other
localized fare. This local deviation from the standard menu is a characteristic for which
the chain is particularly known, and one which is employed either to abide by regional
food taboos (such as the religious prohibition of beef consumption in India) or to make
available foods with which the regional market is more familiar (such as the sale
of McRice in Indonesia).

Mc Café

McCafé is a coffee-house-style food and drink chain, owned by and usually

located in McDonald's restaurants. Created and launched in Melbourne, Australia, in
1993, the chain reflects a consumer trend towards espresso coffees.

Reports indicated that McCafé outlets generated 15% more revenue than a
regular McDonalds and, by 2003, were the largest coffee shop brand in Australia
and New Zealand.
 The chain spread to 13 countries by 2002, with the first one in the United
States opening in Chicago, Illinois, in May 2001 when there were about 300 worldwide.
In 2007, the chain expanded to Japan as part of McDonald's efforts to boost sales with
healthier soup and sandwich offerings and reach out to new customers who favoured
traditional coffee shops. Despite being a relatively small part of McDonald's overall
strategy, there are currently 1,300 worldwide.

McDonald's is introducing a coffee line called "McCafé" nationwide in the United

States. Unlike in other countries, "McCafé" is just a drink, not a full coffee shop.

In August 2008, McDonald's expanded their McCafé concept to South Africa,

where the McDonald's franchise is already a household name and one of the largest fast-
food chains in the country.

The McDonald’s Mascot: Ronald McDonald

• Ronald McDonald has a blast everywhere he goes, entertaining people with his
fun selection of songs, smooth moves and magical tricks. He’s McDonald’s Chief
Happiness Officer, a role he takes most seriously. He believes there’s a bit of
Ronald in everyone and it’s his job to bring it out!
• Tireless in talking about eating smart and staying active, Ronald McDonald is
also McDonald’s Balanced, Active Lifestyle Ambassador and relishes any
opportunity to teach children his special high-energy dance!
• Ronald’s favorite activity is visiting primary schools. Ronald got invited to over
120 schools last year, always bearing a surprise for the kids up his sleeve. At every
school, he makes it a point to include some simple lessons on eating smart and
staying active
 •In his free time, Ronald McDonald loves to visit sick children at the children's
wards at the KK Women's and Children's Hospital and the National University
Hospital. His job in the hospital is to bring a smile to the little children’s faces

More Ronald Trivia!

• Ronald McDonald was born in 1963 and lives in McDonaldland with his friends
Grimace, Hamburglar, Birdie the Early Bird, and The Fry Kids.
• His favorite colors are red and yellow and his feet are a jolly size 29EEE (Extra
long, Extra wide, Extra red).
• He first ventured out into the world to take part in the Macy's Thanksgiving Day
Parade in New York City on November 25, 1966. Cheerful and funny, Ronald
McDonald was such a hit with children at the parade that in 1967, McDonald's
named him its official spokesperson and ambassador to children.
• He gained superstardom in that same year after he appeared on US national
television "starring" in a McDonald's commercial. Naturally warm and generous,
every child in the country wanted to be his friend. Since then he has become a
household name, second only to Santa Claus in popularity!
• In 1967, McDonald’s started venturing into countries across the globe and Ronald
McDonald has learned to speak more than 24 languages. Ronald is fluent in English,
Japanese, German, Gaelic, French, Dutch, Danish, Swedish, Spanish, Mandarin,
Cantonese, Norwegian, Portuguese, Thai, Finnish, Indonesian, Italian, Russian,
Arabic, Malay, German, Tagalog, Turkish and Hindi.

Types of Restaurants

McDonald's restaurants offer both counter service and drive-through service, with
indoor and sometimes outdoor seating. Drive-Thru, Auto-Mac, Pay and Drive, or
McDrive as it is known in many countries, often has separate stations for placing, paying
for, and picking up orders, though the latter two steps are frequently combined; it was
first introduced in Arizona in 1975, following the lead of other fast-food chains. In some
countries "McDrive" locations near highways offer no counter service or seating. In
contrast, locations in high-density city neighborhoods often omit drive-through service.
There are also a few locations, located mostly in downtown districts that offer Walk-Thru
service in place of Drive- Thru.

Specially themed restaurants also exist, such as the "Solid Gold McDonald's," a
1950s rock-and-roll themed restaurant. In Victoria, British Columbia, there is also a
McDonald's with a 24 carat (100%) gold chandelier and similar light fixtures. To
accommodate the current trend for high quality coffee and the popularity of coffee shops
in general, McDonald's introduced McCafés. The McCafé concept is a café-style
accompaniment to McDonald's restaurants in the style of Starbucks. McCafé is a concept
of McDonald's Australia, starting with Melbourne in 1993.

Today, most McDonald's in Australia have McCafés located within the existing
McDonald's restaurant. In Tasmania there are McCafés in every store, with the rest of the
states quickly following suit. After upgrading to the new McCafe look and feel, some
Australian stores have noticed up to a 60% increase in sales. As of the end of 2003 there
were over 600 McCafés worldwide.

Some locations are connected to gas stations/convenience stores, while others

called McDonald's Express have limited seating and/or menu or may be located in a
shopping mall. Other McDonald's are located in Wal-Mart stores. McStop is a location
targeted at truckers and travelers which may have services found at truck stops.

Playgrounds

Some McDonald's in suburban areas and certain cities feature large indoor or
outdoor playgrounds, called "McDonald's PlayPlace" (if indoors) or "Playland"
(outdoors). The first PlayPlace with the familiar crawl-tube design with ball pits and
slides was introduced in 1987 in the USA, with many more being constructed soon after.
Some PlayPlace playgrounds have been renovated into "R Gym" areas.

"R Gyms" are in-restaurant play area that features interactive game zones
designed for children aged 4 to 11. Equipped with stationary bicycles attached to video
games, dance pads, basketball hoops, monkey bars, an obstacle course, and other games
which emphasize physical activity.

The "R Gym" features the Toddler Zone, an active play environment with age
appropriate games that develop physical coordination and social skills; the Active Zone,
designed for children aged four-to-eight that promotes physical fitness through fun play;
the Sports Zone which features a series of sport oriented activities to promote aerobic
exercise for children aged 9-to-11; the Parent Zone which features seating and provides a
monitoring area for their children; and the Dining Area which allows families to eat.

Redesign
In 2006, McDonald's introduced its "Forever Young" brand by redesigning all of their
restaurants, the first major redesign since the 1970s. The new design will include the
traditional McDonald's yellow and red colors, but the red will be muted to terra cotta, the
yellow will turn golden for a more "sunny" look and olive and sage green will be added.
To warm up their look, the restaurants will have less plastic and more brick and wood,
with modern hanging lights to produce a softer glow. Contemporary art or framed
photographs will hang on the walls. The exterior will have golden awnings and a "swish
brow" instead of the traditional double-slanted roof. The new restaurants will feature
areas:

• The "linger" zone will offer armchairs, sofas, and Wi- Fi connections.
• The "grab and go" zone will feature tall counters with bar stools for customers
who eat alone; Plasma TVs will offer them news and weather reports.
• The "flexible" zone will be targeted toward families and will have booths
featuring fabric cushions with colorful patterns and flexible seating.
• Different music targeted to each zone.

Business model
McDonald's Corporation earns revenue as an investor in properties, a franchiser
of restaurants, and an operator of restaurants. Approximately 15% of McDonald's
restaurants are owned and operated by McDonald's Corporation directly. The remainders
are operated by others through a variety of franchise agreements and joint ventures. The
McDonald's Corporation's business model is slightly different from that of most other
fastfood chains. In addition to ordinary franchise fees and marketing fees, which are
calculated as a percentage of sales, McDonald's may also collect rent, which may also be
calculated on the basis of sales. As a condition of many franchise agreements, which vary
by contract, age, country, and location, the Corporation may own or lease the properties
on which McDonald's franchises are located. In most, if not all cases, the franchisee does
not own the location of its restaurants. The UK business model is different, in that fewer
than 30% of restaurants are franchised, with the majority under the ownership of the
company. McDonald's trains its franchisees and others at Hamburger University in Oak
Brook, Illinois. In other countries, McDonald's restaurants are operated by joint ventures
of McDonald's Corporation and other, local entities or governments. As a matter of
policy, McDonald's does not make direct sales of food or materials to franchisees, instead
organizing the supply of food and materials to restaurants through approved third party
logistics operators. According to Fast Food Nation by Eric Schlosser (2001), nearly one
in eight workers in the U.S. have at some time been employed by McDonald's.
(According to news piece on Fox News this figure is one in ten). The book also states that
McDonald's is the largest private operator of playgrounds in the U.S., as well as the
single largest purchaser of beef, pork, potatoes, and apples. The selection of meats
McDonald's uses varies with the culture of the host country.

Environmental record
Discarded McDonalds packaging contributes to the urban litter problem in cities
worldwide. In April 2008, McDonald's announced that 11 of its Sheffield restaurants
have been using a biomass trial that had cut its waste and carbon footprint by half in the
area. In this trial, waste from the restaurants were collected by Veolia Environmental
Services and used to produce energy at a power plant. McDonald's plans to expand this
project, although the lack of biomass power plants in the U.S. will prevent this plan from
becoming a national standard anytime soon. In addition, in Europe, McDonald's has been
recycling vegetable grease by converting it to fuel for their diesel trucks.

Furthermore, McDonald's has been using a corn-based bioplastic to produce

containers for some of their products. Although industries who use this product claim a
carbon savings of 30% to 80%, a Guardian study shows otherwise. The results show that
this type of plastic does not break down in landfills as efficiently as other conventional
plastics. The extra energy it takes to recycle this plastic, results in a higher output of
greenhouse gases. Also, the plastics can contaminate waste streams, causing other
recycled plastics to become un-saleable.

The U.S. Environmental Protection Agency has recognized McDonald's

continuous effort to reduce solid waste by designing more efficient packaging and by
promoting the use of recycled-content materials. McDonald's reports that they are
committed towards environmental leadership by effectively managing electric energy, by
conserving natural resources through recycling and reusing materials, and by addressing
water management issues within the restaurant.

When McDonald’s received criticism for its environmental policies in the 1970s,
it began to make substantial progress towards source reductions efforts. For instance, an
“average meal” in the 1970s—a Big Mac, fries, and a drink—required 46 grams of
packaging; today, it requires only 25 grams, allowing a 46 percent reduction. In addition,
McDonald’s eliminated the need for intermediate containers for cola by having a delivery
system that pumps syrup directly from the delivery truck into storage containers, saving
two million pounds of packaging annually. Overall, weight reductions in packaging and
products, as well as the increased usage of bulk packaging ultimately decreased
packaging by 24 million pounds annually.

McDonald's Advertising

McDonald's has for decades maintained an extensive advertising campaign. In

addition to the usual media (television, radio, and newspaper), the company makes
significant use of billboards and signage, sponsors sporting events ranging from Little
League to the Olympic Games, and makes coolers of orange drink with their logo
available for local events of all kinds. Nonetheless, television has always played a central
role in the company's advertising strategy. To date, McDonald's has used 23 different
slogans in United States advertising, as well as a few other slogans for select countries
and regions. At times, it has run into trouble with its campaigns.

Global Operations
McDonald's has become emblematic of globalization, sometimes referred as the
"McDonaldization" of society. The Economist magazine uses the "Big Mac Index", the
comparison of a Big Mac's cost in various world currencies can be used to informally
judge these currencies' purchasing power parity. Scandinavian countries lead the Big Mac
Index with four out of the five most expensive Big Mac's. Norway has the most
expensive Big Mac in the world as of July 2008, whilst the cheapest country is Malaysia.
McDonald's has also acquired derogatory nicknames, such as "McVomit's" (in parts of
America).Thomas Friedman once said that no country with a McDonald's had gone to
war with another. However, the "Golden Arches Theory of Conflict
Prevention" is not strictly true. Careful historians point to the 1989 United States invasion
of Panama, NATO's bombing of Serbia in 1999, the 2006 Lebanon War, and the 2008
South Ossetia War as exceptions.
 Some observers have suggested that the company should be given credit for
increasing the standard of service in markets that it enters. A group of anthropologists in
a study entitled Golden Arches East (Stanford University Press, 1998, edited by James L.
Watson) looked at the impact McDonald's had on East Asia and Hong Kong in particular.
When it opened in Hong Kong in 1975, McDonald's was the first restaurant to
consistently offer clean restrooms, driving customers to demand the same of other
restaurants and institutions. In East Asia in particular, McDonald's have become a symbol
for the desire to embrace Western cultural norms. McDonald's have recently taken to
partnering up with Sinopec, China's second largest oil company, in the People's Republic
of China, as it begins to take advantage of China's growing use of personal vehicles by
opening numerous drive-thru restaurants. The only countries in Europe not to have
McDonald's stores are Albania, Armenia, Bosnia and Herzegovina and the Vatican City.

Principal Competitors

Burger King Corporation; Wendy's International, Inc.; CKE Restaurants, Inc.;

Jack in the Box Inc.; Sonic Corporation; Checkers Drive-In Restaurants, Inc.; White
Castle System, Inc.; Whataburger, Inc.; YUM! Brands, Inc.; Doctor's Associates Inc.

Marketing Mix
Logic: Marketers have four tools to use to develop an offering to
Meet the needs of their targeted customers. Collectively they are
called the
Marketing mix.
 The marketing mix is generally accepted as the use and specification of the 'four Ps’
describing the strategic position of a Product in the market place.

• Product

• Price

• Place

• Promotion

The 4Ps

At this point the marketing mix is put together.

The Product Life Cycle

• Sales
• Time
• Decline
• Maturity
• Growth
• Development Introduction

Product

The important thing to remember when offering menu items to potential

customers is that there is a huge amount of choice available to those potential customers
with regard to how and where they spend their money. Therefore McDonald’s places
considerable emphasis on developing a menu which customers want. Market research
establishes exactly what this is. However, customers’ requirements change over time.
What is fashionable and attractive today may be discarded tomorrow. Marketing
continuously monitors customers’ Preferences In order to meet these changes,
McDonald’s has introduced new products and phased out old ones over time, and will
continue to do so. Care is taken not to adversely affect the sales of an existing option by
introducing a new option which will cannibalise its sales (trade off).

McDonald’s knows that sales of products on its menu will vary at different points
in their life cycle as is illustrated on the graph to the right.

The type of marketing undertaken and the resources invested will be different
depending on the stage a product has reached. For example, the launch of a new product
will typically involve television and other advertising support. At any time a company
will have a portfolio of products, each in a different stage of its cycle. Some of
McDonald’s options are growing in popularity while arguably the Big Mac is at the
‘maturity’ stage.

Price

The customer’s perception of value is an important determinant of the price

charged.

Customers draw their own mental picture of what a product is worth. A product is
more than a physical item; it also has psychological connotations for the customer. The
danger of using low price as a marketing tool is that the customer may feel that a low
price is indicative of compromised quality. It is important when deciding on the price to
be fully aware of the brand and its integrity. A further potentially adverse consequence of
price reduction is that competitors match the lower prices resulting in no extra demand.
This means the profit margin has been Reduced without increasing the sales.
Promotions

The promotions aspect of the marketing mix covers all types of marketing
communications. One of the methods employed is advertising, sometimes known as
‘above the line’ activity. Advertising is conducted on TV, radio, in cinema, online, using
poster sites and in the press for example in newspapers and magazines. What
distinguishes advertising from other marketing communications is that media owners are
paid before the advertiser can take space in the medium. Other promotional methods
include sales promotions, point of sale display, merchandising, direct mail, telemarketing,
exhibitions, seminars, loyalty schemes, door drops, demonstrations; etc.The skill in
marketing communications is to develop a campaign which uses several of these methods
in a way that provides the most effective results. For example, TV advertising makes
people aware of a food item and press advertising provides more detail. This may be
supported by in-store promotions to get people to try the product and a collectable
promotional device to encourage them to keep on buying them It is imperative that the
messages communicated support each other and do not confuse customers. A thorough
understanding of what the brand represents is the key to a consistent message. The
purpose of most marketing communications is to move the target audience to some type
of action. This may be to buy the product, visit a restaurant, recommend the choice to a
friend or increase purchases of the menu item. Key objectives of advertising are to make
people aware of an item, feel positive about it and remember it. The more McDonald’s
knows about the people it is serving, the more it is able to communicate messages which
appeal to them. Should gain customers’ attention and keep their interest. The next stage is
to get them to want what is offered. Showing the benefits which they will obtain by
taking action is usually sufficient. The right messages must be targeted at the right
audience, using the right media. For example, to reach a single professional woman
within come above a certain level, it may be better to take an advertisement in
Cosmopolitan than Woman’s Own. To advertise to mothers with families, it may be more
effective to take advertising space in cinemas during Disney films. The right media
depends on who the viewers, readers or listeners are and how closely they resemble the
target audience.

Place

Place, as an element of the marketing mix, is not just about the physical location
or distribution points for products. It encompasses the management of a range of process
involved in bringing products to the end consumer.

Conclusion

Once the marketing strategy is in place, various responsibilities are given to

different individuals so that the plan can be implemented. Systems are put in place to
obtain market feedback which measure success against short-term targets.
Segmentation

Geographic Segmentation

Mc Donald’s has outlets internationally and sells its products according to

geographic needs of the customer. In India Mc Donald’s focuses how geographically its
customers demand different products

Demographic Segmentation

In demographic segmentation, the market is divided into groups based on an age,

gender, family size, income, occupation, religion, race and nationality Mc Donald’s
divides the market on demographic basis in this way:

• Age is between 6-65 years.

• Gender is both males and females.
• Family size is 1-2, 3-4, 5+
• Income is Rs 10,000 n above

Psychographic Segmentation

Dividing a market into different groups based on social class, lifestyle or

personality characteristics is called psychographic segmentation. Mc Donald’s divides
market on the basis of psychographic variables like

• Social class- Upper and Middle class.

• Lifestyle is not specific.
• Personality is ambitious and authoritarian

Positioning
Marketing strategy that aims to make a brand occupy a distinct 'position,' relative
to the competing brands, in the mind of the customer. Firms apply this strategy either by
emphasizing the distinguishing features of their brand (what it is, what it does and how,
etc.) or try to create a suitable image (inexpensive or premium, utilitarian or luxurious,
entry-level or high-end, etc.) through advertising. Once a brand is positioned, it is very
difficult to reposition it without destroying its credibility.
 • Develops Brand Image
• Creates Demand
• Creates Demand
• Creates Value In the Mind of Customer
• Commands Premium Price

“Mc Donald’s Mein hai kuch baat” a place for entire family to enjoy. Mc
Donald’s

Positioned for youth families. Positioning is about communicating your unique

selling advantage or proposition to your Target audience in everything you do.
Marketing, sales, customer service. The consistency helps your customer remember.
Can't articulate your unique selling proposition in less than 10 words? Maybe you lack
clarity about positioning. Our marketplaces have lots of choices. Too many, perhaps, for
the average consumer to evaluate logically. With hundreds of choices in any given locale,
many people simply look for a referral to a product or with professional services: a
company that their friend trusts. Those who shop around consider two or three options
and take the best of the three. With hundreds of choices, and with products and services
that most consumers find hard to differentiate, how do you set yourself, apart from the
crowd?

Positioning allows a marketer to think about why a customer would want to do

business with them. What do you offer that the other producers don't? What does a
potential client get by doing business with you, that will serve their needs well?
Positioning has three components: What are your strengths? Your distinctive
competencies? What about your offerings provide value to your customers? Who is your
target customer? What about them makes them an ideal fit for the value you offer? How
are you different from your competitors in ways that your customers and potential
customers will value? In other words, what is your unique selling proposition? Your
competitive advantage? When all three are put together, you have a positioning
statement. Positioning statements are the basis for all marketing messaging, sales scripts,
and at a corporate level: branding.

So here are the things you need to know to be able to develop your own market
positioning:· Who are you? As a company? As a sales rep? What is your firm or known
for? (Ask people what they think. It may not be what your internal talk says it is. Is it
prompt claims? Or telling it like it is? Or it might just be everyone knows you.) What do
your customers appreciate about your products or services? (Ask your colleagues and
your customers. Again, it might not be what you think. Maybe you are known for high
quality. Or perhaps for returning calls promptly or your problem solving

Ability. Maybe it is just that you are convenient. ) What are you particularly
strong at? (These are your core competencies.) What are you better at, than anyone else
in your business? As a company? As a professional? As a sales rep? (Quality?
Innovation? Cost effective choices?) Who are your most satisfied customers? What is it
that they value most about what you have to offer? Based upon your sales goals and
annual plan, who is your target market? The key here is the fit between what you do well
and who or what type of business needs what you are good at. What value can you bring
your customers that they will value the most, based upon your unique strengths? At a
company level, can you articulate this competitive value for your target, best customers?
Does your branding reflect this? Do your communications use this messaging as its
foundation? Are your web, collateral, and sales force attuned to this value? Do your
services focus on this value? Does your customer service reflect this value? Does your
customer service reflect the promise of the brand? Or are customers continually shocked
that the customer service is not like the brand image at all? Your customers are
bombarded with hundreds - perhaps thousands - of commercial messages each day.
Believe it or not buying your product or service is probably not their most important
priority. So, in the end, it comes down to relationships. Does your vendor understand
your needs? Thus, positioning is EVERYTHING, because, positioning is that unique
value you offer, to that target market you seek, in ways that are better, more effective,
more amazingly meeting your needs than any of your competitors. And, the customer
service, and employee relationships need to MATCH or be INTEGRATED with the
market

Competitive Advantage

• Mc Donald’s lies in the utilization of its technology, routinization of work and

general deskilling of labor.
• Mc Donald’s bases its worker control and efficiency on one principle: worker
stupidity.
• Mc Donald’s implements the Fredrick Taylor method of installing managers and a
system of pre determined activities called task management.
• Mc Donald’s goal is to maximize its profits including all devious means.
• Mc Donald’s maintains its competitive advantage by constantly creating new item
to add on to its menu.
• Mc Donald’s also realized the changing world we live in and the need for
healthier food.

SWOT Aanlysis
Strengths

• Strong brand name, image and reputation.

• Large market share.
• Strong global presence.
• Specialized training for managers known as the Hamburger University.
 • Mc Donald’s Plan to Win focuses on people, products, place, price and
promotion.
• Strong financial performance and position.
• Introduction of new products.
• Customer focus (centric).
• Strong performance in the global market place.

Weakness

• Unhealthy food image.

• High Staff Turnover including Top management.
• Customer losses due to fierce competition.
• Legal actions related to health issues; use of trans fat & beef oil.
• Uses HCFC-22 to make polystyrene that is contributing to ozone depletion.
• Ignoring breakfast from the menu.

Opportunities

• Growing health trends among consumers.

• Globalization, expansion in other countries (especially in China & India).
• Diversification & acquisition of other quick service restaurants.
• Growth of the fast food industry.
• Worldwide deregulation.
• Low cost menu that will attract the customers.
• Freebies & discounts.

Threat

• Health professionals & consumer activists accuse Mc Donald’s of contributing to

the country’s health issue of high cholesterol, heart attacks, diabetes & obesity.
• The relationship between corporate level Mc Donald’s & its franchise dealers.
• Mc Donald’s competitors threatened market share of the company both
internationally & domestically.

PEST Analysis
Political
 • In general terms the government policies do not affect the company much nor do
the
• Changes in the government influence the organization of the company.
• Mc Donald’s enjoys an added advantage in countries where consumer protection
laws are not very strong.
• The international operations of Mc Donald’s are highly influenced by the
individual state policies enforced by each government.

Economical

• Market leader.
• Very high target market.
• Low cost and more incomes.
• The rate at which the economy of that particular state grows determines the
purchasing power of the consumers in that country.

Social

• As Mc Donald’s offer Hilal food, there are no religious, ethical or cultural issues
associated with the operations.
• For the rising importance of Corporate Social Responsibility (CSR) recently Mc
Donald’s has announced that it is giving further backing to Rainforest Alliance
certification by offering a cup of tea with a conscience in all of its 1200
restaurants in the UK.

Technological

• Food made with the help of machines is considered more hygienic.

• However, the constant developments in the technology sector needs Mc Donald’s
to keep itself updated regularly.
• It is natural that technology has helped Mc Donald’s and especially its employees
as they have to serve quick services.
• Computers and smart cashiers are used by the employees so they do not get
confused and they are provided with customized database management system.

BGC Matrix
According to the BCG Matrix, Mc Donald’s lies on the STAR quadrant which
signifies that it enjoys a high market share along with a high growth rate. Mc Donald’s, in
comparison to its competitors, enjoys a huge customer base right from the age group of 5
yrs to 60 yrs. Its menu offers a range suitable for both vegetarian as well as no-
vegetarian appetite.
 Mc DONALD’S SINGAPORE

Environment
Many of their customers care about preserving our planet’s natural resources.
Increasingly, they are considering these values in the purchasing choices they make every
day. Mc Donald’s share these values and try and do all they can to play a part. The
following are some of the efforts Mc Donald’s has made to ensure that natural and social
environments are respected and sustained throughout their food supply chain.

Reduction in Packaging Material

 To reduce their packaging impact, they focus on a number of things. Less
packaging material means less packaging costs, and a reduced environmental burden of
waste management.

They choose manufacturing processes and raw materials with less environmental
impact, including recycled fiber and materials from renewable resources. As early as
1989, McDonald’s restaurants in Singapore adopted formacel as an ozone-friendly
alternative to CFC containing Styrofoam food packaging. These were soon replaced
altogether with paper and paper-based containers that allow for better waste management.

By 1991, McDonald’s had become Singapore's single largest user of recycled

paper, saving the equivalent of 17,500 trees and 56 Olympic-size pools of water in the
process. Currently, products with recycled content include carryout bags, napkins, drink
carriers, trayliners, shipping containers, and some types of folding cartons. In all, they
involve a mixture of post-consumer and pre-consumer materials, with a strong preference
for post-consumer.

In 2003, each restaurant purchased approximately 23.3 tons of packaging. With so

much paper and other material making their way through their restaurants, waste
reduction is not only an important part of their responsibility towards the environment –
it’s fiscally prudent.

Responsible Purchasing

“Our influence in the marketplace comes with a responsibility to ask for more than
quality and price…”

In partnership with Conservation International, McDonald’s has developed a set

of guidelines that provide a framework for prioritizing their social responsibility and
environmental efforts. Each restaurant and every party that supply McDonald’s with beef,
fish, poultry, eggs and vegetables are held to the following environmental guidelines:

• Maximize the efficiency of water use and eliminate the release of waste into water
• Minimize the release of harmful by-products into the air
• Maximize the efficiency of energy use and use ecologically sustainable renewable
sources when feasible Minimize waste production, maximize recycling and ensure
proper handling and disposal of solid waste
 • Maintain soil health by controlling erosion and improving structure and fertility
• Preserve natural habitats for native species and for the protection of biodiversity
• Minimize the use of chemicals and pest management inputs that impact human,
animal and environmental health
• Ensure that animals’ needs of food, water and space – as well as other
physiological, behavioral and hygienic needs are consistently met.

Animal Welfare

One of their social responsibility commitments is to ensure that animals' needs of

food, water and space – as well as other physiological, behavioral and hygienic needs are
consistently met. A core of our global programme ensures compliance with their
principles through onsite processing facility audits and supplier training.

Pursuing a Responsible Fish Supply

McDonald’s has been working with their fish suppliers and Conservation
International to develop environmental guidelines on fish sourcing as part of their global
fish strategy. The aim is to help McDonald’s source from well-managed fisheries by
providing information and guidelines on how to help less well-managed ones recover and
adjusting purchasing from at-risk fisheries that do not improve.

Careers
“Take care of our people, and the business will take care of itself” ~ Ray Kroc,
McDonald’s founder

At McDonald’s, they know that their people are their most valuable
resource.They invest in their growth and job satisfaction and provide learning and
development opportunities for every single employee who walks through their doors.
They know that they can grow as a company, only if they enable their people to grow,
contribute and feel proud to work for McDonald’s.
 Today, more than 1.6 million people worldwide work under the Golden Arches.
In Singapore, McDonald’s employs more than 6,000 people in over 120 company-owned
restaurants island wide. And the number increases every day.

In their restaurants, people learn what it takes to succeed. Their renowned training
and coaching practices mean they develop skills and attitudes that last a lifetime. As they
grow in their jobs, they gain experience and opportunities for leadership and management

"The way we see the future, we'll need more of the people we already have -
people who go beyond what is expected; people with ambition and enthusiasm; people
who will enjoy coming to work every day with a passion to deliver the best they can to
our customers" says Mr Kenneth Chan, Managing Director, McDonald's Restaurants Pte
Ltd.

At the end of the day, perhaps the requirement is best summed up by their
managers, when they say they’re looking for people with “ketchup in their veins”. People
who will be proud to go the extra mile to make their customers feel special and to provide
an exceptional McDonald's eating experience - every visit, every time.

McDonald's Gives Back Greater Value to Customers with as

much as 30% Savings All Year Round
McDonald’s gives back greater value to customers this year with a McValue
Lunch programme all year round. Customers can enjoy real value at McDonald’s with as
much as 30% savings on value meals.

Launched on February 2, the McValue Lunch programme allows customers to

enjoy their favourite meals of the same great quality but at reduced prices during
weekdays from 12 noon to 2 pm, available for dine-in or take-away.

Customers can choose from a wide variety of McValue Lunch:

• Double Cheeseburger Extra Value Meal* (S$4.50)
• Filet-O-Fish Extra Value Meal* (S$4.50)
• McChicken Extra Value Meal* (S$4.50)
• McNuggets (six pieces) Extra Value Meal* (S$4.50)
• McWings (four pieces) Extra Value meal* (S$4.50)
• Big Mac Extra Value Meal* (S$5.00)
• McSpicy Extra Value Meal* (S$5.00)
*With Fries (Medium) and Coca Cola (Small)

“In the current economic climate, we believe more than ever in putting our
customers first by giving them even greater value on the food they love. We are giving
back by committing to a full-year McValue Lunch programme because it’s the right thing
to do. It is our way of thanking our loyal customers for their support through these 30
years, and we hope they will continue lovin’ McDonald’s as their first choice,” said Alex
Yeo, General Manager, McDonald’s Singapore.

CSR in Mc Donald’s Singapore

Many see their local McDonald’s as a place to have a meal or a snack at a

reasonable price. But McDonald’s likes to go beyond these dimensions and think of the
broader role of their restaurants play in the communities they serve. It’s important to their
customers, to their employees, to the company, and to the memory of their founder that
they give back to the communities that give them so much.

All around the world, McDonald's embraces and puts into practice Ray Kroc's
philosophy of always giving back to the communities in which we operate. In memory of
Ray Kroc, Ronald

McDonald House Charities was founded in 1984 to provide comfort and care to
children and families.

The Year in Review (FY2007/2008)

 The Ronald McDonald Children’s Charity (RMCC) was incepted in Singapore in
1989. Since then, RMCC has helped more than 800 children with medical, rehabilitative
and surgical treatments totaling over S$4 million. Through these years, the five most
common requests for funding have been for medicines and drugs, nutritional
supplements, handicap aids, leukemia treatment and surgery treatment and surgery.

RMCC’s first beneficiary

20 years ago, a beautiful baby girl was brought to this world. However, what was
meant to be a moment of joy soon became her parents’ most anxious and helpless
moments. Jane Lee, RMCC’s first beneficiary, was diagnosed with a congenital heart
disease soon after she was born. The numerous surgeries and post operative care Jane had
to go through during the initial years of her childhood exhausted her parents’ savings.
Despite this, they were determined to do whatever they could to help Jane lead a normal
life, like other children. Just when they were at their most helpless moments, help arrived
through the RMCC, which helped to fund Jane’s medical follow-up at the Royal
Melbourne Children’s Hospital in Australia.

Today, Jane is a happy, healthy young adult pursuing her dreams to be a nurse.

Over $2 million raised to help sick children in Singapore

Working through the Ronald McDonald Children’s Charity, McDonald’s

Singapore has raised over $2 million to support children with serious illnesses since
1989. Administered by the KK Women’s and Children’s Hospital, the funds raised have
helped countless families pay for their children’s medical bills, and get all the treatment
they need to lead normal, fulfilling lives.

$300,000 raised for Tsunami Victims

Struck by the tragedy that had befallen our neighbors, McDonald’s employees and
customers worldwide raised over US$3 million to help children and families in the
tsunami-hit regions. In Singapore, $260,000 was raised through Singapore Red Cross
donation cans in 130 McDonald’s restaurants. Another $30,000 was raised through the
sale of Prosperity Burgers in Jan 2006.
$50,000 Aid for Children Infected With HIV

In November 2004, McDonald’s World Children’s Day raised a whopping

$50,000 for Singaporean children infected with the HIV virus. The sum was raised from
the sale of “Helping Hands” at $1 each, through RMCC donation boxes and through a 10-
cent contribution for every pack of fries sold at McDonald’s restaurants on that day.

Bringing Communities Together in Sport

McDonald’s has been the official restaurant of the Olympic Games since the first
batch of hamburgers was airlifted to athletes competing in the 1968 Games in France.
And now, for the first time in Olympic history, McDonald’s has signed an agreement that
will keep them a Global Sponsor all the way through to the 2012 games.

But it’s not just Olympics that they support. They look for sports reflective of
their own values: universality, accessibility and team spirit. That’s why you’ll see them
cheering you on at the New Paper Big Walk every year, and why they go to great lengths
to support the annual Olympic Day Runs. If an activity brings people in a community
together for healthy, joyful activity - They’re game!

McDonald’s Mc Happy Day in Singapore

In November 2008, 750 Mc Family (McDonald’s employees and their family
members) took to the streets of Singapore to sell Ronald McDonald Gloves and raised
over $52,000 each while setting the record for The Largest Number of People Wearing
and Waving Over-sized Gloves in the Singapore Book of Records!

Promotion
Mc Donald’s Monopoly Singapore Game Promotion
 The McDonald's Monopoly game is a sweepstakes advertising promotion
of McDonald's and Hasbro that has been offered in the United
States, Canada, Germany, United Kingdom, France, Portugal, the
Netherlands, Australia and Singapore since 1987. In recent years, Best Buy has been
involved in the U.S. version and recently in the Canadian one as well. It has also gone by
various other names including "Monopoly Best Chance Game" (2003-05, the first years
of Best Buy's involvement) and "Monopoly/Millionaire Game", a version based on the
Who Wants to Be a Millionaire TV show.

The game mimics the game of Monopoly. Originally, customers received a set of
two tokens with every purchase, but now tokens only come with certain menu items.
Tokens correspond to a property space on the Monopoly board (with the exception of the
"Golden Avenue/Arches Avenue" properties, which were added in the 2008 edition of the
game). When combined into color-matched properties, the tokens may be redeemed for
money. Historically, the grand prize ($1 million) has been the combination of the two
most costly properties, Park Place and Boardwalk, but in a 2006 game the grand prize (in
this case $5 million, with the traditional $1 million prize for Boardwalk/Park Place) was
awarded for collecting the four railroads. There are also "instant win" tokens the recipient
can redeem for McDonald's food (typically small menu items such as a free
small McFlurry or medium fries), money, or other prizes, including anXbox 360.
Coupon pieces
Additionally, in the 2007 edition, certain foods always come with one coupon
which can be used at either Best Buy, Toys R Us or Foot Locker (this includes the online
stores) Although it is certain to get one coupon, the value of the coupon is random,
with Toys R Us coupons ranging from $1 to $5, and they allow up to $5 in coupons to be
used in a single transaction, allowing up to five coupons to be used at each store visit,
depending on their values. In 2008, these coupons can be redeemed for up to 25% off of
all Foot Locker items with the in store coupons. In 2009, the promotion will not feature
any coupons.