1. THE McDonald's CASE Examining McDonald’s from local & global marketing perspective Presented by Mission Statement 2009: "McDonald'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."
Mission Statement (2009): "McDonald'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." http://www.samples-help.org.uk/mission-statements/mcdonalds-mission-statement.htm McDonalds is the no: 1 fast food chain stores with a 40 million customers visiting it per day. It has over 30,000 branches in 120 countries. It derives 80% of its revenues from eight countries like Canada, Brazil, Germany, France, Japan, UK, Australia and US. The greatest strength was creating an image in the minds of the people and introducing them to the fast food culture. Delivery speed, customer care and cleanliness are the core strengths on which these stores expanded.
INTRO: McDonald's has become emblematic of globalization McDonaldization . 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 . (http://en.wikipedia.org/wiki/Mcdonalds#cite_note-retrieved_May_08.2C_2008-9) Within the Greek territory McDonald’s main competitors are: Goody’s Everest Pizza Hut Dominos Gregorys KFC Simply Burger Facts (sources) http://www.businessweek.com/magazine/toc/06_32/B399606globalbrands.htm http://www.mcspotlight.org/media/press/mcds/theguardian090401.html Figures: (http://www.express.gr/news/news-in-english/229239oz_20091104229239.php3 Πηγή: Express 04/11/09-12:28 ) http://news.kathimerini.gr/4dcgi/_w_articles_economyepix_2_07/02/2007_214946 http://news.kathimerini.gr/4dcgi/_w_articles_economyepix_2_07/02/2007_214946 http://www.axiaplus.gr/Default.aspx?id=145008&nt=108&lang=1 http://www.answers.com/topic/mcdonald-s CHART info supplied by ICAP http://learningsupport.elke.uoa.gr/tee_episkepsis/appdata/documents/profiles_attiki/everest_trofodotiki_aebe.doc
CEO Jim Skinner said, "Over the last seven years, we have stayed committed to the Plan to Win and our focus on being better, not just bigger . http://phx.corporate-ir.net/phoenix.zhtml?c=97876&p=irol-newsArticle&ID=1354836&highlight= McDonald's restaurants are found in 118 countries and territories around the world and serve nearly 45 million customers each day. McDonald's operates over 30,000 restaurants worldwide, employing more than 1.5 million people. (http://www.mcdonalds.gr/) McDonald's Greece opened its first restaurant in 1991 at the center of at Syntagma Square in Athens. Today there are 27 McDonald's restaurants and a McCafé, 15 Drive-Thru’s and 7 seasonal restaurants employing approximately 1,500 individuals (operating via franchising contracts). Serving approximately 11,000 customers/day. (http://www.mcdonalds.gr/) Mc Donald’s Objectives : Reasonably priced excellent quality food, served fresh and hot, quickly and precisely, in a clean and friendly environment. A new eating out experience for consumers and their families. Product variety and innovations on the menu as well as in restaurant operation. Carefully selected locations, upgraded and renovated on a continual basis, while providing convenience and safety, especially for children. http://www.mcdonalds.gr/ CHART info: ICAP (2007) http://www.greekretail.gr/print/2679/index.html
Since 1991, McDonalds in Greece introduced and developed new categories of products. These categories developed according to Corporate Head office incentives and by info supplied by cluster departments on our local customer trends, social issues and cultural behaviors. Products such as the Vegetarian menu, Kids meals, Drive Thru meals etc. were introduced in the Greek market where other products (McSaracosti) were introduced and produced locally. Last on the product introduction line is the McCafe concept where McD’s (global & local level) will try to gain market share from with other corporations (e.g. Starbucks) and local competitors (Coffee Time, Costa etc.). The first McCafe in Greece is running at Athens Intl. Airport. As we can see, McD’s developed the categories of products over the years. In order to achieve sustainable growth, in future each category is more likely to divide and form more categories. This “Tenth immutable law of marketing’ explains that “Over time, a category will divide and become two or more categories” Jack Trout in Athens 2007.
Over the years, McD’s launched various brand positioning strategies for all its products. Though, in 2005 the premier mass market branding giant, announced that it has abandoned positioning. Says Larry Light, McDonald's chief global marketing officer: "Identifying one brand position, communicating it in a repetitive manner is old-fashioned, out of date, out of touch." Even more bluntly, Light highlights "the end of brand positioning as we know it," calling it "marketing suicide." ( according to the consultancies Ernst & Young and McKinsey & Co. ) http://www.brandingasia.com/columns/011.htm During the last 5 years and in order to avoid further losses, McD’s has been trying to create ‘positioning flexibility’ via the use of the above mentioned branding activities. Such activities are likely to increase the product's perceived value to the customer and thereby increase brand franchise and brand equity . Flexibility is created by adjusting products and services with quick response times according to customer needs. In order to achieve this, McD’s ought to utilize new channels of communication with the market via getting ideas from customers and using the New media, Social media, E-commerce etc. Within the Greek region, McD’s positioning strategies are and will be affected by customer’s perception on ‘What McDonald’s represent’. For many years, many Greek customers perceived McD’s as ‘The example’ of the US imperialism. Nowadays, McD’s are working on the desired identity they want to project via the above named activities.
Product One of the aims of McDonald’s is to create a standardized set of items that taste the same whether in Greece , US or South Africa . Adaptation is also required for many reasons including consumer tastes/preferences and laws/customs . In Greece such adaptation to local can be seen with McSaracosti products. Place : McDonalds restaurants are mainly locatedaround central districts in cities and near areas with the highest concentration of the targeted groups. Restaurants and McCafe’s located at airports. Part of the PLAN to WIN strategy for 2010 is to open about 1,000 new restaurants and reimage 2,300 existing locations worldwide in 2010. http://phx.corporate-ir.net/phoenix.zhtml?c=97876&p=irol-newsArticle&ID=1354836&highlight= http://www.aboutmcdonalds.com/mcd/investors.html
Promotion McDonald’s looks to localize its marketing communications strategy as it needs to consider the enormous range of cultural and other differences that it would be faced with in each country . McDonald’s is reconnecting with customers via its new brand strategies. Price McDonald’s has realized that, despite the cost savings inherent in standardization, success can often be attributed to being able to adapt to a specific environment. This is indeed the case with its implementation of its pricing strategy, which is one of localization rather than globalization. The official stance on McDonald's pricing policy is highlighted in the company's mission statement . Another successful pricing strategy was the McDonald’s “Dollar Menu” or the so called in Europe “One for One” menu. The Dollar /One for One Menu was created because McDonald’s recognized that the economy was in a decline and that their competition was getting fiercer. McD’s launched the largest advertising campaign since 1970: http://www.agora.mfa.gr/agora/images/docs/radA4411%CE%9A%CE%B9%CE%BD%CE%B7%CF%84%CE%B9%CE%BA%CF%8C%CF%84%CE%B7%CF%84%CE%B1%20%CE%B5%CF%80%CE%B9%CF%87%CE%B5%CE%B9%CF%81%CE%AE%CF%83%CE%B5%CF%89%CE%BD%20%CF%83%CF%84%CE%BF%20Illinois.doc
People McDonald’s is utilizing personnel up to a great extent and collaborates with a variety of people who directly or indirectly influence the perceived value of the product or service, including knowledge workers (local franchisees) , employees, management , suppliers and other brands. Process McDonald’s looks to localize its marketing communications strategy as it needs to consider the enormous range of cultural and other differences that it would be faced with in each country . http://www.top-term-paper-sites.com/essays/marketingmix.html PLAN to WIN . McDonald's Corporation Chief Executive Officer Jim Skinner and members of senior management outlined the Company's priorities to continue to drive growth in sales, market share and returns through a strategic focus on its customers and restaurants under the successful Plan to Win. This includes plans to open about 1,000 new restaurants and reimage 2,300 existing locations worldwide in 2010. http://phx.corporate-ir.net/phoenix.zhtml?c=97876&p=irol-newsArticle&ID=1354836&highlight= McDonalds appoints environmental affairs officers and these officers are given broad based responsibilities to ensure that thisorganisation is fulfilling its environmental objectives. Physical Evidence High standards in staff training. Quality in service. Revamped and new restaurants. McCafe’s friendly environment. Menus built from scratch with local variations according to consumer needs . Synopsis : After analyzing the marketing mix of McDonald’s, it is clear that the company can be said to be `global’, i.e. combining elements of globalization and internationalization. McDonald’s have achieved this through applying the maxim, `think global, act local’ (Ohmae, 1999), to all the elements of the marketing mix.
Although McDonald’s try to maintain an image of high ethical responsibility major gaps have been identified. They manage to disguise a considerable part of these gaps through effective (positive) communications. However major gaps remain in terms of working conditions and animal welfare treatment. Product It is difficult to evaluate the extent to which McDonalds fulfils customers’ demands. In the a consumer survey conducted by Sandelman & Associates, McDonald’s was ranked as last out of 60 chains for taste. Organization On the one hand McDonald’s receives Government money for educating young people, on the other it encourages the industry to design kitchen equipment that affords less training. McDonald’s should rather concentrate to provide a valuable skill for their people. Avoid past examples such as the one of China, where children as young as 14 have been working 16 hour days for as little as $3. Customer : Heavily investing in the Kid’s market, this is seen as hypocritical within society partially because of the latest issue of McDonalds food is soaring rates of childhood obesity, heart disease, and diabetes, which customers are not warned about. (The Guardian 26.Nov2002-Youngster sue for McDonald’s for failing to warn that fast food can lead to obesity). Although McD’s provide nutritional information about every product, more customers need to be made aware that this information is available. Business Direction Claiming to be the best employer their anti union policy rather suggests a limited influence for employees to improve their working conditions. Unions are part of a modern society and McDonald’s should consider introducing unions. Business Processes When dealing with environmental performance, because McDonald’s as an organisation is related to the services industry there are little statutory requirements by law or regulation to record environmental data. Through having little quantifiable data, there is no physical evidence of actually achieving the necessary environmental aims and objectives. I.T. McD’s ougt to invest more on the utilization of the Social media since they will have a considerable impact on market structure and customers perception about product and services.
To become a more desirable employer McDonalds should aim to provide better working conditions. Allow the existence of unions, and increase the number of training schemes. Also, McDonalds Workforce has a high share of teenagers, although there is no requirement for employees to be of this age. McDonalds benefits from this by paying only the minimum wage but this could be seen as exploitation. However, it is a good way of keeping labour costs down. There are constant and ongoing social changes in the population. Examples include the increased health-awareness of society. In the long term, major menu diversification to accommodate more healthy foods could be regarded as necessary if they want their customers to enjoy their food with a clear conscience. Also, improve food taste and size. Utilise new means of communicating with the customer and obtaining crucial feedback. Develop e-commerce strategies. McD’s organisation has developed their own Environmental Management System and this will help monitor the environmental on annual basis.
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