Marketing Project: McDonald’s

Introduction

Marketing is a complex process that involves more than just promotional activities. In the contemporary business world, the need for marketing has significantly increased with increased level of competition. Marketing can be defined as a process of facilitating an exchange of something of value for something needed.

This implies that the marketing process is likely to come along with some costs. Marketing process is a very important part of any organization. It is therefore necessary to have a clearly designed marketing plan in order to have a successful organization. It is always necessary to understand the customer’s needs while conducting a marketing plan.

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1. Industry Analysis

In the current world, the food retail industry has significantly developed. Many players have entered into the market, which has led to rise in the level of competition in the industry.

There are several international corporations which are engaged in food retail all over the world. Over the past, these organizations have been engaged in stiff competition with each of them aiming at winning the highest fraction of the market share.

For instance, there was a high level of competition in 1980s which was referred to as “hamburger wars”. This was characterized by price battle which led to a significant fall in prices. In the contemporary world, the level of competition has significantly increased which has led to intensification in competition in the industry.

There are several competitors in the food distribution industry in the world. Some of these includes the Burger King, Wendy’s International, Inc., Jack in the Box, Checkers Drive-In Restaurants, Sonic Corporation, White Castle system, Whataburger, CKE Restaurants, Doctor’s Associates and YUM Brands (Africa Awards for Entrepreneurship, 2011: par 20).

However, these organizations are in most cases engaged in numerous lines of products. Some does better in some while some are better in another line. However, some lines pose a high level of competition.

2. Company Background

McDonald’s is one of the most successful businesses across the world. This corporation is owned by a group of people who comes from all over the world. Among these people are the Muslims and the Arabs. McDonald’s is a neutral corporation which is independent of religious or political interference. McDonald’s is owned by Arab and Muslim business men in Arabian countries (McDonald’s, 2011: par 3). These individuals are responsible for the operations of this corporation in these countries.

McDonald’s is the world’s top leading organization in the food service industry (McDonald’s, 2011: par 1). The origin of this corporation can be traced back in 1930s when it started showing good performance in the market.

With time, the organization continued with a progress. In its early stages of development, some of the main foods produced were cheeseburgers, hamburgers, shakes, French fries, apple pie and soft drinks (Africa Awards for Entrepreneurship, 2011: par 3).

In 1960s, the company recorded a significant boost in the level of its performance. In 1965, the organization offered its shares in public at a price of $ 25.50 each (Africa Awards for Entrepreneurship, 2011: par 5).

This was one of the major steps in the process of taking off. Soon after the launch of these shares, the prices shot up to $30 per share. Over the past, the company has encountered a high level of competition from its competitors.

This has severally threatened the performance of the organization. However, the company has managed to retain its high level of performance. For instance, the company was faced by a major challenge in 1980s during the hamburger wars. This battle was between various companies in the hamburger chains. During this period, McDonald’s intensified its advertisement campaigns.

During this period, the market was characterized by aggressive advertisement campaigns and cut of prices. This reduced the level of returns significantly for McDonald’s. However, McDonald’s market share continued to expand during the time (Africa Awards for Entrepreneurship, 2011: par 7).

McDonald’s has a very close examination of the need of its customers. In connection to this, the company planned to diversify its menu in order to suit the changing needs of its customers. As a result of these changes, company introduced chicken McNuggets in 1983 (Africa Awards for Entrepreneurship, 2011: par 8). By the end of the same year, McDonald’s managed to emerge as the second largest chicken retailer in the world. This marked a tremendous growth soon after introduction.

One of the strengths of McDonald’s is the fact that its employees are very efficient in their jobs (Africa Awards for Entrepreneurship, 2011: par 9). This had a significant contribution in performance of the organization. For instance, it reduced the operational expenses. As a result of increased employees’ efficiency, McDonald’s to lower the prices of its key products (Africa Awards for Entrepreneurship, 2011: par 11).

In 1960s, McDonald’s high level of performance can be attributed to the organization’s skillful marketing and flexibility on response to customer’s demand. With time McDonald’s continued with its expansion where it opened several new restaurants in the region. For instance, the organization was opening its 1,000th restaurant in 1968 (Africa Awards for Entrepreneurship, 2011: par 12).

During this period, the chief administrative and president of the company was Fred Turner. The company also has a global presence and is considered a market leader in the global market. This simplifies the marketing process.

One of the main weaknesses of the company is that it faces high price competition or price wars with its competitors. This leads to reduction in the profit margins. Another weakness with McDonald’s is that it uses advertisement strategies which targets children. This denies the company a chance to reach many people.

3. Marketing Strategy or Problem

Marketing Strategy Overview

Marketing Strategy Statement

In the contemporary business world, the market is characterized by a very high level of competition. In order for any organization to survive in such a market, there is a need to have an effective marketing strategy. As already noted, the food retail industry in the world has been similarly faced with a very high level of competition. In order for any corporation to survive in such an environment, it must employ the most effective marketing strategy.

In this case, the aim of this strategy is to increase the level of sales in hamburger. This type of food product faces a high level of competition in the market. This has threatened its performance in the market. This strategy is aimed at helping in increasing the level of sales of this product.

Objectives

The main objective of this marketing plan is to increase the level of the sales of the McDonald’s hamburgers. From the results released towards the end of the year 2010, the sales rose by 4.8 per cent (Sodersmith, 2010: par 1). This increase was significantly attributed to addition of new items in the menu. In other words, very little of this increase can be attributed to sales from the existing products. Therefore, this strategy aims at increasing the level of hamburger sales by 4% by the end of this year.

This strategy is also aimed at increasing the company’s market share for hamburgers. Currently, McDonald’s is facing a very high competition from Subway. Subway is increasing its stores across the world rapidly. Therefore, the objective of this strategy will be to help the organization in retaining its performance. Despite of the high level competition, McDonald’s still remains ahead of Subway in terms of revenue with each recording $24.1 billion and $15.2 billion respectively in 2010 (Casestudyinc 2011: par 1).

Market Share for Top performing restaurants

20021997
McDonald’s7.3%McDonald’s7.8%
Burger King3.0%Burger King3.6%
Wendy’s2.4%Taco Bell2.2%
Subway1.9%Pizza Hut2.1%
Taco Bell1.9%Wendy’s2.1%