McDonald's is the world's largest fast food chain with over 34,000 restaurants in 119 countries. It serves over 70 million customers daily. The company was founded in 1955 and has since expanded globally through franchising. Key facts include annual revenues of $27 billion and over 420,000 employees. McDonald's core values are clean environment, quality food at affordable prices, and adapting menus to local cultures. It has targeted various consumer segments through products, pricing, and family-friendly environments. Challenges have included health concerns and competition.

2. CONTENTS
 INTRODUCTION
 HISTORY
 FACTS AND FIGURES
 CORE BRAND VALUES
 CONSUMER BEHAVIOUR ASPECT
 TARGET MARKET SEGMENT
 ADVERTISING CAMPAIGNS
 INITIATIVES TAKEN
 PRICING STRATEGY
 PROBLEMS FACED BY THE COMPANY
 QUESTIONS

3. INTRODUCTION
•McDonald’s is the world’s leading
hamburger fast-food chain with more than
34000 restaurants in 119 countries.
•More than 80% of McDonald’s restaurants
are owned and operated by franchisees.
•McDonald’s serves 70 million people each
day and promises an easy and enjoyable food
experience for its customers.

4. HISTORY
o McDonald’s Corporation dates back to 1955 when
Ray Kroc, a multi-mixer salesman, franchised a
hamburger restaurant from the McDonald’s
brothers.
o He helped design the building, which featured
red and white sides and a single golden arch that
attracted local attraction.
o Later in September 1961, the company filed for a
trademark on a new logo – an overlapping,
double arched M symbol which later developed
into the single arched M.

5. FACTS AND FIGURES
 McDonald's restaurants are found in 119
countries and territories around the world and
serves 70 million customers each day.
 McDonald's operates 36,615 restaurants
worldwide, employing more than 420,000 people.
 As of 2012, McDonald’s experienced record
revenues of $27 billion.

6. CORE BRAND VALUES
 Strong emphasis on clean environment.
 Hot, high-quality good at a great value.
 High quality food service throughout the
world.
 Adaptation of local restaurants to
different cultures and environments.
 Introducing new products and services to
enhance customer service.

7. CONSUMER BEHAVIOUR ASPECT
• The company responded to customers’ desire for
healthy foods with premium salads and apple
slices instead of French fires in its Happy Meals.
• By introducing all-white McNuggets, it dismissed
claims of “mystery meat.”
• McDonald’s targeted teenagers and its lower-
income consumers with the introduction of the $1
menu.

8. TARGET MARKET
SEGMENT
o The segmentation strategy of McDonald’s can be
discussed under the following heads :
o Geography:
McDonald’s has its restaurants in 119 countries.
Its restaurants have adapted to the local
environment and culture. For example,
McDonald’s introduced a Bacon Roll in the UK, a
premium M burger in France and a McPuff in
China.

9. o Demography:
• Demographically, the McDonald’s appears to have
segmented its market on the following parameters :
 Income level:
• In a market like India where a significant proportion of
India’s population lies in the lower income bracket, the
price of the products becomes very critical. The pricing of
the products is done keeping in mind the wants of the
middle class and the upper middle class, the income
category which has grown at a very significant pace over
the past few years.
 Age:
• The earlier strategy of the McDonald’s was to segment the
market on the basis of the age, by catering mainly to the
kids and youth. However, now they are trying to blur this
segmentation and focus on the all age groups.

10.  Family:
• McDonald’s is now targeting the entire family by offering
various incentives packed product schemes like “family
meals” at a very competitive price.
 To target its core audience – children and families – it
introduced Ronald McDonald.
 Comfortable Seating Arrangements:
• In many locations, McDonalds created three different zones
that fit the needs of each target audience: a linger zone
with comfortable sofas, a family zone with tables and
chairs and an efficient zone for consumers who needed to
grab a quick bite.

11. ADVERTISING CAMPAIGNS
 The company introduced Ronald McDonald
during a 60-seond commercial in 1965.
 Characters like Grimace, the Hamburgler and
Mayor McCheese made their debut in
McDonald’s advertising and helped lure children.
 Its current campaign, “I’m Lovin’ It,” seems to
connect with McDonald’s large consumer base
and keep them coming back again and again.

12. INITIATIVES TAKEN
 In 1974, McDonald’s opened the Ronald
McDonald House, a charitable cause to help
children with leukaemia.
 McHappy Day is an annual event where a
percentage of the day’s sales go to charity.
 McRefugees are poor people in in Hong Kong,
Japan and China who use McDonald’s 24-hour
restaurants as a temporary hostel.
 Introduction of McCafe to directly target
consumers in the booming coffee industry.

13. PRICING STRATEGY
McDonald’s pricing strategy can be further
analyzed under following heads:
oProduct Line Pricing:
McDonalds offers a range of products and the
pricing reflects the benefits of the range. So one
can order a Coke or a Coke with a burger at an
additional price.
oProduct Bundle Pricing:
McDonalds combines several products in the same
package. For example one can buy a single burger
or one can consider various other options which
gives the customer a range of products available.

14. o Promotional Pricing:
Discounting a combination of products as one
product. McDonald’s clubs three or four products
together and price of this new product will be
lesser than the sum of the individual products.
o Value Pricing:
McDonalds realized that consumers are price
conscious and hence introduced premium priced
meals. For example, the $1 menu.

15. PROBLEMS FACED BY THE
COMPANY
 During the overseas expansion, the company lost
focus and direction as it added over 2000
restaurants an year.
 Inefficient employee training which led to poor
customer service.
 Intense competition from Subway, Panera Bread,
Dominos etc.
 Failure of product launces like pizzas and deli
sandwiches.
 Health conscious customers avoiding McDonald’s
restaurants.

16. WHAT ARE MCDONALD’S CORE BRAND
VALUES? HAVE THESE CHANGED OVER
THE YEARS?
 Strong emphasis on clean environment
 Hot, high-quality good at a great value
 High quality food service throughout the world
 Adaptation of local restaurants to different
cultures and environments
 Introducing new products and services to
enhance customer service

17. HOW HAS MCDONALD’S GROWN ITS
BRAND EQUITY OVER THE YEARS?
 Menu expansion – Introducing new items like Big Mac, the
Quarter Pounder, the Happy Meal and breakfast items like Egg
McMuffin.
 Innovative advertising campaigns – To target its core audience –
children and families – it introduced the famous clown, Ronald
McDonald.
 By aggressively expanding overseas, McDonald’s has added as
many as 2000 new restaurants every year.
 By offering localised products like Bacon Roll breakfast sandwich
in Britain and a premium M burger in France.
 Meals charged at premium prices. Also, McDonald’s targeted
teenagers by introducing the $1 menu.
 Creating seating arrangements that suited different types of
customers.
 By taking part in the booming coffee industry by introducing
McCafe.

18. HAS MCDONALD’S CHANGED IN
DIFFERENT ECONOMIC TIMES OR IN
DIFFERENT PARTS OF THE WORLD?
McDonald’s has changed both in economic times
and in the different parts of the world. Since the
company aggressively expanded overseas during
the early 2000s, there was a decrease in the quality
of services. But after implementing the strategy
“Plan to win,” the results produced were staggering
with an increase in revenues by 33%. The company
has changed in the different parts of the world
because of its changes in the menu according to the
local cultures and environments.

19. WHAT RISKS DO YOU THINK
MCDONALD’S WILL FACE IN THE
FUTURE?
 The present day world is more health conscious.
So people putting on a diet will avoid eating at
McDonald’s thereby decreasing its sales.
 Today, McDonald’s is facing more competition
because there are similar outlets there which
offer similar services. Ex – Dominos, Subway,
Pizza Hut etc.
 There’s always a decrease in quality of the
services while expanding overseas. The reasons
can be attributed to insufficient and inefficient
training of employees, maintenance issues etc.

20. THANK YOU

21. DISCLAIMER
 Created by Siddartha Mashetty, IIT Kharagpur,
during a marketing internship, by Prof. Sameer
Mathur, IIM Lucknow.