McDonald’s has been a family name for the last many decades. It operates on a franchise based model which has enabled it to spread all over the globe. It’s operations have been largely profitable. In fact, it was only in 2003 that McDonald’s reported its first ever quarterly loss. Since then a lot has changed in the way McDonald’s reaches out to the customer. This is the focus of the discussion here. James R. Cantaloupe, Chairman and CEO, McDonald’s said in 2003 – “The world has changed.
Our customers have changed.
We have to change too. ” This laid the foundation for the change which McDonald’s went through. A key aspect of understanding what strategy to follow is to re-assess the needs of the market. Also the company’s relationship with the internal stakeholders like the franchisees needed to be reviewed. During the process of evaluation, McDonald’s used the latest technological tools like the internet to enable their brand managers to communicate with the franchisees and compare and improve their services.
McDonald’s studied demographics to identify which customer profiles visited there franchises and for what reasons. They realized that kids were their biggest customers – but to get the kids to come in to the restaurants the parents had to be convinced also. During the study they also identified health consciousness as a major factor driving people away from McDonald’s. Another factor affecting sales was the products offered as customers were looking for options other than the complete meals offered.
Delivery times also came up as important determinants of customer satisfaction. Based on the studies, McDonald’s conducted SWOT analysis and came up with a new marketing strategy based on the marketing mix consisting of 4Ps – Product, Price, Promotion and Place. They decided to focus on expanding the product range to include healthy and low cost options. They also reviewed their promotion strategy to target kids who belonged to the biggest consumer category.
They also streamlined their processes to reduce delivery times. 2) Using relevant examples, evaluate how successful the organisation’s environmental scanning strategy is. Suggest how this strategy can be improved. The steps taken by McDonald’s to change their marketing mix have been highly successful in getting the customers and the profit back. In 2006, McDonalds’s had its best sales performance for 15 years in Europe. McDonald’s decided to go in for a health conscious image. They offered a range of healthy food selections on their menu. They also started to publish the nutritional content details of the food items on the packaging.
New ‘Saver’ products were offered which promised a ‘quick bite’ for a low price. These changes in the product offerings were supported by promotional campaigns designed win back the lost customers. The processes required for getting the product to the customer were also reviewed. This resulted in tie-ups with local vendors to ensure freshness of the inputs. McCafes were introduced as exclusive coffee shops to attract the young crowd which needed a meeting point to get together with friends. The advertisements which addressed kids specifically helped bring the kids back.
Availability of healthier food options and information about the nutritional value of the available products has helped them win a large number of health conscious consumers. To increase customer satisfaction they also focussed on the time taken to deliver their products. McDonald’s can take a number of steps to get a better understanding of the environment they’re a part of. This, if followed by appropriate changes to the marketing mix, can help enhance the sales performance and profitability in the future. Some of these possible steps are discussed below. The internet can be a very effective tool to reach the masses.
McDonald’s can use the internet to run online promotion and research campaigns. Also the use of the social networking options like Twitter and Facebook can be beneficial to understand their customers and their requirements better. Improved analysis of the supply chain processes can help in increasing their efficiency. This can result in reduced costs and therefore reduced prices for the customers thus increasing sales. McDonald’s can also analyse the franchise locations so that they can be spaced more evenly compared to the current situation where the distribution is not so even.