McDonald's Marketing Strategy

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Darrin C. Duber-Smith

Since 2000, Darrin C. Duber-Smith, MS, MBA, has been president of Green Marketing, Inc., a Colorado-based strategic planning firm offering marketing and sustainability planning, marketing plan implementation, and other consulting services to companies in all stages of growth. He has over 25 years of specialized expertise in the marketing and management profession including extensive experience in working with natural, organic, and green/sustainable products and services. He is a co-founder of the Lifestyles of Health and Sustainability (LOHAS, c. 1999) market concept and leader of the first U.S. industry task force that helped frame an industry definition of natural (c. 2005). He has published over 60 articles in trade publications and has presented at scores of executive-level events over the past 15 years. Mr. Duber-Smith is Visiting Professor of Marketing at the Metropolitan State College School of Business in Denver, CO and Affiliate Marketing Professor at the Leeds School of Business at the University of Colorado-Boulder. Mr. Duber-Smith was the recipient of the Wall Street Journal's In-Education Distinguished Professor Award for 2009, and is author of Cengage Learning's KnowNow! Marketing blog. He can be reached at DuberSmith@GreenMarketing.net

I guess this is going to be a week of McDonald's, just like my diet sometimes.  I still maintain that the Big Mac is the best hamburger ever made.  Anyway, here we go.  McDonald’s is known for its innovative market positioning. There is no doubt that McDonald’s rapid growth is based on intelligent and smart business ideas based on the dynamics of the business environment and societal changes. The restaurant, which was started, in 1948 with just one outlet now has its footprint across the globe. It’s global sales continues to enjoy healthy growth, despite global economic hardships. 

If we list the most known innovative ideas introduced by McDonalds, first thing that comes to our minds is the concept of the Happy Meal – a combo meal for children featuring a free toy that made McDonald’s restaurants the most demanded place for meals by kids across the globe. The second most interesting concept that the chain introduced in 1975 was the drive-thru feature, a brand new feel of comfort for “on the go” customers to beat their hunger with quick purchasea of meals. This idea now accounts for more than half of restaurant system-wide sales.

 

With the influx of different minority groups in the North American market, and McDonald’s international presence, now the company is concentrating on customer taste from African Americans, Hispanics, and Asians backgrounds. Its menus and advertising both reflect this interesting change in McDonald’s marketing strategy. For instance, a recent report, compiled by ad tracker Nielsen IAG, suggests that while the ads usually push specific products or deals, many use situations aimed directly at ethnic consumers. For example, in a recent commercial called “Big Day,” a young boy at a wedding looks bored while watching the bride and groom kiss and jump over a broom—an African American matrimonial tradition. His eyes light up, however, when he gets to his seat and finds a Happy Meal. Thanks to some excellent research by McDonald’s; the company understands itscustomers well, and now the fruit combinations in the restaurant chain's latest smoothies reflect taste preferences in minority communities. Moreover, they also started heavily advertising coffee drinks last year; the ads emphasized the indulgent aspects of sweeter drinks like mochas, to attract customers with certain specific preferences.  Neil Golden, McDonald’s US Chief Marketing Officer, says “The ethnic consumer tends to set trends, so they help set the tone for how we enter the marketplace and preferences gleaned from minority consumers shape McDonald’s menu and ad choices, which are then marketed to all customers”.

McDonald’s expansion started in the late 1960’s and at that time the focus was to appeal to customers by presenting a nice clean place where they can enjoy family meals that offer good value for the money. The chain now operates over 31,000 restaurants worldwide, employing more than 1.5 million people. The company learned it cannot feed the typical American taste for a long time and still attract customers, and its market growth will depend only on inclusion of new flavors and choices on its menu. Going international was not that challenging; the key challenge is to remain at the top in market share and to attract more and more customers by giving them the values for which they are searching. Entrepreneurship is alive and well inside this massive company and it all is about turning crazy ideas into profits and only innovative marketing strategies by McDonald’s help the company remain at not only at the top in market share, but also growing annually despite the questionable global economy.  GB

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