McDonald’s Marketing Mix 1

McDonald’s Corporation: Marketing Mix

Gary Phillips

University of Phoenix
 McDonald’s Marketing Mix 2

McDonald’s Corporation: Marketing Mix

Similar to a fine recipe and its ingredients, a marketing mix recipe includes four

ingredients, product, price, place, and promotion (4 P's), (Kotler and Keller, 2006). Marketing

strategies are developed through a process of thorough research, which will provide the vehicle

for determining the correct product/service, appropriate pricing structures, with effective

placement and promotion for establishing the proper position in the marketplace for achieving

optimal return on investment (ROI). The recipe for success has served McDonald’s restaurants

well since its inception, 1955, as a lone hamburger stand in Des Plaines, Illinois; further, founder

Ray Kroc created McDonald’s Corporation, with the specific purpose for expanding the business

by franchising; McDonald’s represents one of the most valuable brand names in the world

(Rowley, 2004).

Each new global franchise featured standardized brand product values in concert with

diverse cultural fare, owned, manned, and supplied by local communities. Acting or expanding

globally while thinking locally is the broad marketing strategy that has allowed McDonald’s to

retain its competitive advantage as the world’s largest fast-food retailer. In a statement from

1958, which still headlines the corporate governance page Ray Kroc advanced “The basis for our

entire business is that we are ethical, truthful and dependable” (McDonald’s.com, 2009, ¶ 1).

How has this strategy affected market mix attributes, the way that they were implemented, and

transformed for ensuring the long-lasting success of this giant?

Product

Life in the 1950s was simpler than today—no personal computers, no internet, no cell

phones, no jet airplanes, no health or wellness consciousness—that lended itself nicely to the
 McDonald’s Marketing Mix 3

early success of McDonalds’ simple product line of burgers, fries, and thick ice creamy milk

shakes. McDonald’s provided a value-based choice for convenience dining, as family units grew

in size—baby boomers—and product affordability, which was served efficiently in a meticulous

environment became appealing, not to mention the soon to be iconic golden arches and Ronald

McDonald. Competition offered no threat and by 1958, the growing company sold its 100

millionth hamburger.

The refinements and miraculous advances of society increased the presence of

competitors, as a trend towards healthy living was fast becoming an accepted lifestyle. The days

of resting on one’s laurels were outdated—that is if a company expected to continue operating

with increased worth. McDonald’s reinvented its product lines over the years and never lost

touch with controls for monitoring service processes—getting customers in and out quickly,

conveniently, and with the appropriate order was a recipe for expansion into the global

marketplace. Two years after their tenth anniversary in 1965, which was celebrated with an

initial public offering price of $22.50, McDonald’s commenced global operations in Canada and

Puerto Rico; further, presently operations span the globe in 118 countries (McDonald’s.com

history, 2009).

With product mainstays such as the Big Mac, Quarter Pounder, French Fries, Filet-o-Fish,

Happy Meals, breakfast fare, salads, soft drinks, coffees, teas, and desserts amongst others,

McDonald’s franchises were established in such exotic locations as India, Israel, China,

Singapore, Fiji, and Morocco. Extensive research preceded expansion into diverse lands, which

afforded smooth franchise transitions to operate and expand within the mindset of ‘think locally’.

Collaborations with local citizens proved to be a valuable lesson and a profitable one.
 McDonald’s Marketing Mix 4

McDonald’s franchises featured native citizens as owners, employees, and suppliers, which

allowed for that seamless integration.

All McDonald franchises agree to conduct business that will offer consistency of

products and services. Adapting to the local customs and ethnicities in China for example, the

‘Prosperity Burger’ is offered during Chinese New Year celebrations. This popular item has seen

the number of outlets in China swell to 1,000; further, the vegetarian ingredients of the

Maharajah McBurger has revolutionized franchises in India by respecting the religious and

cultural custom, which forbids eating beef (McDonald’s.com, history, 2009).

Competition from Starbucks, which introduced breakfast sandwich and coffee combo

specials in addition to daily croissant/sweet roll with a coffee, was answered by McDonald’s with

the introduction of McCafe, a premium offering of coffees, blended, and iced offered at a more

reasonably priced commodity than that at Starbucks. In keeping with the trend towards healthy

lifestyles, McDonald’s once again has demonstrated a shift to meet changing market demands by

providing zero trans-fats in its fries, Filet-O-Fish, and other products. Frankly, McDonalds offers

products on a global basis, which provides a revolutionary blend of product conformity with

creativity.

Promotion

Promoting products is as diverse as the global print of this fast food giant, but consists of

five vehicles for informing and offering many reasons to choose McDonald’s: advertising, direct

marketing, sales promotions, public relations/publicity, personal selling (Kotler and Keller,

2006). Advertising ploys are similarly carried out in various countries, which feature a celebrity

touting the value, quality, and affordability offered by the franchise. In China for example,
 McDonald’s Marketing Mix 5

money was saved by avoiding television advertising, as programs only feature advertising

between episodes, and studies indicated that the majority of viewers would change to another

station, thus advertising has been targeted in print—newspapers and magazines (Vignali, 2001).
 McDonald’s Marketing Mix 6

Direct marketing has been achieved through the internet, as globally positioned web sites

cater to specific cultural diverseness while considering ethnic, religious, moral, and consumer

attitudes towards products. Promoting the corporate vision for respecting all communities by

operating in a ‘green’ manner, disclosing healthy alternatives with posted nutritional information,

and providing interactive features, such as feedback has been effective for keeping an eye on

customer needs and monitoring change in attitudes as a vehicle for maintaining a posture that is

poised for market upheavals (Rowley, 2004).

Sales promotions are launched to keep the consumer informed of the value to quality

relationship, which has been successfully used for sustaining and expanding corporate wealth.

Offering various contests such as the Monopoly game transforms mere consumers into contest

game players, often returning for another visit, which would not have occurred without the lure

of winning prizes and money. The initial themes of circus flare Happy Meals, has sustained the

interest of the younger set, with Walt Disney Characters included in Happy Meals. Offering

values for the mature customer—parents—creates an enjoyable and fulfilling experience for the

entire family. Everybody is happy! Big Mac jingles and current slogan “I’m loving it” have kept

a freshness to advertising campaigns.

Public relations are important to McDonald’s. A visit to Mcdonald’s.com offers

something for every member of the family, including rich content for students who are interested

in using McDonald’s as a topic for term papers. McDonald’s acts responsibly by respecting the

global environment and the diverse populations that this fast food mogul operates in—a green

machine! Feedback is welcomed and the rich history of this historic company is presented as an

interactive feature on the main company’s website. In Beijing, individuals are hired as public
 McDonald’s Marketing Mix 7

relations agents for the company; further, creativity, originality, and a corporate mind set for

satisfying all communities creates value (Vignali, 2001).

Ronald McDonald House was established in various communities as a program to assist

children and their families with special needs, such as serious medical conditions. According to a

special webpage titled Cause that Counts, 2009, ¶ 4,

Research shows that 92% of Americans have a more positive image of companies that

support a cause. And, 87% of Americans are likely to switch brands, when price and

quality are equal, to support a cause. These trends are consistent around the globe.

Mcdonald’s has been the official sponsor of the Olympics and other sporting events. In 1977,

McDonald’s selected its first ever All-American High school Basketball Team, which played an

exhibition game against the Washington Nationals, famed for always playing and losing to the

Harlem Globetrotters (McDonald’s.com, history, 2009). McDonald’s cares and maintains an

optimal balance of the right type of public exposure.

Employees are extensively trained in all aspects of safe food handling, product

information, and courteous customer service. Product information varies among the diverse

cultures, but consistency in employee awareness for safe food handling and dedication to

excellent customer service parallels the basic product food fare offered on virtually all

McDonald’s menus. Informed and polite people on the other side of the counter makes the

experience for the customer much more gratifying.

Placement and Price

 McDonald’s Marketing Mix 8

Various research studies have indicated that McDonald’s has saturated the United States

market, but opportunities still exist in the global marketplace as new nations feel the effects of

technological wonderments. This causes the standard of living to improve, education standards to

improve, and with knowledge comes power. The power of knowledge improves the mortality

rate, stabilizes fertility rates, and creates a new market for McDonald’s to expand responsibly,

ethically, and with respect for the environment, as corporate wealth and value is enhanced.

According to Vignali, 2004, “McDonald’s overall pricing objective is to increase market

share” (¶ 3, Pricing Decisions). Extensive studies into market sectors thoroughly researches

demand, factors in costs, analyzes competitor positioning, and systematically arrives at a price

that will sustain customer demand for value, quality, and convenience, all delivered in a clean,

pleasingly friendly environment. Value menus featuring selected items for one-dollar increase

customer traffic and revenues as other regularly priced products are added to the order. A win-

win situation for all parties will increase market share and shareholder wealth.

Conclusion

McDonald’s operates in an environment that is influenced by diverse cultures, ethnic

customs, religious tenets, political systems, consumer watchdog groups, and fierce competition

from other entities seeking to erode some of the dominant market share that McDonald’s enjoys.

Including all of its shareholders in the process for ensuring that quality, value, consistency,

customer relations, and a willingness to change with the winds of consumer preferences has been

that recipe for success, and should be a formula that will sustain the latest slogan, “I’m loving

it”!
McDonald’s Marketing Mix 9
 McDonald’s Marketing Mix 10

References

About McDonald’s. (2009). Cause that counts. Retrieved June 30, 2009, from
http://www.aboutmcdonalds.com/mcd/students/mcdonalds_does_good/cause_that_counts.html.

Kotler, P. & Keller, K.L. (2006). Marketing management (12th Edition). Pearson: Prentice-Hall.

McDonald’s.com. (2009). Retrieved June 29, 2009, from

http://www.aboutmcdonalds.com/mcd/investors/corporate_governance.html.

McDonald’s.com history. (2009). Retrieved June 29, 2009, from

http://www.aboutmcdonalds.com/mcd/our_company/mcd_history.html.

Rowley, J. (2004). Online branding: The case of McDonald’s, British Food Journal, Vol. 106,

No. 3, (228 – 237). Retrieved June 30, 2009, from Emerald Full Text Article database.

Vignali, C. (2001). McDonald’s: “think global, act local”—the marketing mix, British Food

Journal, Vol. 103, No. 2,(97 – 111). Retrieved June 29, 2009, from Emerald Full Text

Article database.