Marketing Mix of McDonalds and 7Ps (Updated 2024)

The Marketing mix of McDonalds analyses the 7Ps of McDonalds which includes the Product, Price, Place, Promotion, People, Physical Evidence and Process of McDonalds. McDonald’s Corporation is the largest fast-food restaurant chain in the world based on revenue and the second-largest private employer globally. It is ranked ninth in the world based on the highest global brand value and is also the largest buyer of apples, potatoes, pork, and beef. McDonald’s fast-food business operated as a hot dog stand by the McDonald brothers, Richard McDonald and Maurice McDonald. In 1955, a franchise agent and a shrewd businessman, Ray Croc, joined the company and later purchased the fast-food chain from the McDonald brothers. The rest is history, as Ray Croc adopted an aggressive expansion policy and helped McDonald’s restaurants establish their footing in international markets.

Introduction to McDonald’s Corporation

• Origin Country: United States of America
• Founder: Richard McDonald, Ray Kroc, and Maurice McDonald
• Founded: 15th May 1940
• Headquarters: Chicago, Illinois, USA
• McDonald’s Employees: 200,000
• Annual Revenue in 2023: 23.594 billion USD
• Net Income in 2023: 6.081 billion USD
• Market Value in 2023: 199.560 billion USD
• Market Cap in 2023: 182.78 billion USD

McDonald’s Product Strategy

The product mix of McDonald’s, one of the world’s largest fast-food chains, is diverse, catering to various tastes and preferences across the globe.

The new Product Mix of McDonald’s in 2024 is as follows (Source).

1. Burgers & Sandwiches: McDonald’s offers various burgers and sandwiches, including classics like the Big Mac, Quarter Pounder with Cheese, and the Filet-O-Fish, alongside regional variations to cater to local tastes.
2. Chicken & Fish: This category includes crispy chicken sandwiches, McNuggets, and sometimes local specialties like McChicken variations and fish options beyond the classic Filet-O-Fish.
3. Breakfast Items: The McDonald’s breakfast menu includes Egg McMuffin, Sausage McMuffin, hotcakes, breakfast burritos, and McGriddles. The availability of breakfast items can vary, with some locations offering all-day breakfast options.
4. Salads & Vegetables: McDonald’s has introduced various salads and vegetable options over the years, including side salads and more substantial meal salads with different proteins. However, availability can vary by market.
5. Snacks & Sides: This includes items like French fries, apple slices, mozzarella sticks, and onion rings in some markets, along with regional specialties.
6. Desserts & Shakes: McDonald’s offers a range of desserts, including soft-serve ice cream cones, sundaes, McFlurry desserts, and milkshakes in various flavors.
7. Beverages: The beverage line-up includes soft drinks, coffee and tea, milk, juices, and smoothies, as well as McCafé items like espresso-based drinks, iced coffees, and frappés.
8. Happy Meal: Targeted at children, the Happy Meal includes a main item (like a burger or chicken nuggets), a side (like fries or apple slices), a drink, and a toy, with some variations by the market to include healthier options.
9. Seasonal & Limited-Time Offers: McDonald’s frequently introduces seasonal items, limited-time offers, and special promotions that reflect local tastes or festive seasons, such as the McRib, Shamrock Shake, or unique items for local celebrations.
10. Regional & Local Specialties: McDonald’s adapts its menu to include items that cater to local tastes and preferences in different countries. This can consist of Asian rice dishes, poutine in Canada, or unique burger variations in various countries.

McDonald’s Pricing Strategy

McDonald’s pricing strategy is critical to its business model and overall marketing approach, enabling it to remain competitive in the global fast-food industry while catering to a diverse customer base. Here are key points that outline McDonald’s pricing strategy:

1. Value Pricing: McDonald’s employs a value pricing strategy to offer products at a price point perceived as providing good value for money. This strategy is designed to attract price-sensitive customers and encourage repeat business.
2. Psychological Pricing: Psychological pricing tactics are standard, such as pricing items just below a whole number (e.g., $0.99 instead of $1.00). This approach makes prices appear lower than they are, which can enhance the attractiveness of their offerings to consumers.
3. Tiered Pricing: McDonald’s menu features a tiered pricing structure, from value items on the Dollar Menu to premium offerings like specialty burgers and salads. This allows customers with different spending capacities to find options within their budget, catering to a wide demographic.
4. Bundle Pricing: The company frequently uses bundle pricing strategies, such as meal combos and family deals, which package multiple items at a discounted rate compared to purchasing each item separately. This not only offers perceived value but also encourages larger purchases.
5. Dynamic Pricing: In some markets, McDonald’s has experimented with dynamic pricing strategies, where prices of certain items may vary based on factors like time of day, demand, and local economic conditions. This approach helps maximize profits and manage inventory efficiently.
6. Competitive Pricing: McDonald’s closely monitors competitor pricing within the fast-food industry to ensure its prices remain competitive. They may adjust prices on key items to match or undercut competitors, helping to attract cost-conscious customers.
7. Geographical Pricing: Recognizing the economic disparities across different regions, McDonald’s adjusts its pricing strategy to reflect local purchasing power and cost of living. This ensures that its offerings remain affordable and competitive in various markets.
8. Promotional Pricing: The company frequently employs promotional pricing strategies, including limited-time offers, discounts, and special deals, to drive traffic and increase sales volumes during slow periods or to introduce new items.
9. Cost-Plus Pricing: To determine the price of new products, McDonald’s may use a cost-plus pricing strategy, setting prices based on the cost of production plus a fixed margin. This ensures profitability while maintaining competitiveness.
10. Price Discrimination: McDonald’s uses price discrimination to offer discounts to certain groups (like students or seniors) or at specific times (like breakfast hours) to attract different market segments.

McDonald’s Place Strategy

McDonald’s place strategy is a fundamental aspect of its overall marketing approach, focusing on maximizing accessibility and convenience for customers worldwide. Here are five key points that highlight McDonald’s place strategy:

1. Global Presence with Local Adaptation: McDonald’s operates in over 100 countries, ensuring a widespread global presence. Each location is carefully chosen to cater to local tastes and preferences, often incorporating local architectural styles and menu items to blend with regional cultures.
2. Strategic Location Selection: The company places its restaurants in high-traffic areas such as shopping centers, airports, and major roadways. This strategic selection aims to maximize visibility and convenience for customers, making it easy for them to stop by.
3. Franchise Model: A significant portion of McDonald’s restaurants are operated by franchisees, which allows for rapid expansion and local market penetration. This model supports localized management while adhering to global standards for quality and service.
4. Drive-Thru and Delivery Services: McDonald’s has invested heavily in drive-thru services and partnerships with food delivery platforms to enhance convenience. This approach caters to customers seeking quick and convenient meal options without leaving their car or home.
5. Digital and Mobile Ordering: McDonald’s has embraced digital innovation by offering mobile ordering and payment through its app. This streamlines the ordering process and integrates with their loyalty program, encouraging repeat business and enhancing customer experience.

McDonald’s Promotion Strategy

The company has positioned its brand as a restaurant chain that offers quality, cost-effective meals in a fun environment. The promotion bundle pricing strategy used in McDonald’s marketing mix focuses on its target market, where the customers’ likes and preferences reign over everything else.

McDonald’s has launched iconic advertising campaigns to boost marketing communications with its customers over the decades. McDonald’s promotion strategies include.

Traditional Media

The company spends a considerable of its marketing budget on McDonald’s promotion strategies through traditional media like newspapers, radio, television, and hoardings. The brand has created particular digital marketing strategies and campaigns with Ronald McDonald, its mascot, to attract children’s customers.

Seasonal Events

The company organizes seasonal events like McHappy Day. This is held annually, and a percentage of the sales goes to charity. McHappy Day is the company’s restaurant’s signature event for Ronald McDonald House Charities.

McDonald’s unveiled the “Christmas Food Menu for 2022” with fan-favorite treats like Christmas-themed McFlurry, Big Tasty Burger, Cheese Melt Dipper, McCrispy, and The Festive Pie for a six-week duration during a promotional event.

Direct Marketing

The brand believes in a direct marketing strategy and, through customer opinions, tries to make appropriate changes to the marketing plan. It also offers discount coupons to boost sales volume and gain a competitive advantage over rival brands.

Social Media

Information is uploaded on the company website to inform the customers about products and product changes. The company also advertises food products online via social media platforms like Instagram, Facebook, and YouTube, as they know that marketing communications are best done through social media platforms.

Sponsorships

McDonald’s employs a significant sponsorship and marketing budget to boost brand recognition. As a founding member, it sponsored the 1998 FIFA World Cup and 23X1 Racing.

Some Recent Video ads and Print ads for McDonalds are:

McDonald’s People Strategy

The “People” aspect of McDonald’s service marketing mix is crucial for customer satisfaction and maintaining the brand’s reputation with more global customers. Here are key points regarding the “People” element in McDonald’s service marketing mix:

1. Employee Training and Development: McDonald’s invests heavily in training and development programs for its employees, known as crew members. These programs ensure that staff are well-equipped to provide high-quality service, understand the company’s operational procedures, and maintain hygiene standards.
2. Customer Service Focus: The brand emphasizes exceptional customer service, aiming to create a welcoming and friendly atmosphere for all guests. Employees are trained to handle customer inquiries and complaints efficiently and with a positive attitude, reinforcing customer satisfaction and loyalty.
3. Diversity and Inclusion: McDonald’s is committed to diversity and inclusion within its workforce. The company hires people from various backgrounds and cultures, reflecting the diverse communities they serve. This approach not only promotes a positive and inclusive work environment but also helps in understanding and catering to the needs of a diverse customer base.
4. Employee Satisfaction and Retention: McDonald’s focuses on creating a positive work environment by recognizing the link between employee satisfaction and customer service. This includes offering competitive wages, benefits, and career advancement opportunities, which helps retain talented employees who are passionate about their roles.
5. Teamwork and Collaboration: McDonald’s promotes a culture of teamwork and collaboration among its staff. Employees are encouraged to work together to achieve common goals, such as improving service speed and quality. This collaborative environment ensures operations run smoothly and customers receive the best possible service.
6. Leadership and Management: The leadership and management teams at McDonald’s play a vital role in shaping the company’s service culture. They are responsible for setting high standards, motivating employees, and leading by example. Effective leadership ensures that the company’s values are upheld across all levels of the organization.
7. Feedback and Continuous Improvement: McDonald’s values customer and employee feedback as a means of continuous improvement. This feedback is used to adjust service procedures, training programs, and employee engagement strategies, ensuring that the brand remains responsive to its customers and staff’s needs and expectations.

McDonald’s Process Strategy

The “Process” aspect of McDonald’s service marketing mix is critical in ensuring customer satisfaction, operational efficiency, and consistent service delivery across its global network. Here are key points regarding McDonald’s “Process” prices and pricing strategies used in its service marketing mix:

1. Standardized Operating Procedures: McDonald’s employs standardized operating procedures worldwide to ensure consistency in service and product quality. This includes everything from food preparation and order taking to cleanliness and customer service, enabling customers to have a similar experience globally at any McDonald’s restaurant.
2. Efficient Order Systems: The brand utilizes technology-driven order systems, including digital kiosks, mobile app ordering, and third-party delivery platforms. These systems are designed to streamline the ordering process, reduce wait times, and improve overall customer experience.
3. Supply Chain Management: McDonald’s has a highly efficient and ethical supply chain process, ensuring the timely delivery of fresh ingredients to its restaurants. The company works closely with suppliers to maintain quality standards and sustainability practices, which are crucial for menu consistency and reliability.
4. Quality Control Measures: At every step, from sourcing ingredients to serving customers, McDonald’s implements strict quality control measures. These include regular health and safety inspections, employee hygiene training, and temperature controls to ensure food safety is always prioritized.
5. Customer Feedback Loops: The company has established mechanisms for capturing and analyzing customer feedback, such as surveys and feedback forms available through digital platforms or in-store. This feedback is integral to continuous improvement efforts, allowing McDonald’s to promptly adjust its processes and address any areas of concern.
6. Training and Development: McDonald’s invests in comprehensive training and development programs for its staff, ensuring they are well-versed in the company’s processes and customer service standards. This ongoing training reflects updates in technology, menu offerings, and service protocols.
7. Innovation in Service Delivery: McDonald’s continuously innovates its service delivery processes to enhance efficiency and customer satisfaction. This includes adopting new technologies, like AI, for order-taking in drive-thru and experimenting with robotics for food preparation and delivery in specific markets.
8. Waste Management and Sustainability Practices: The order-taking company has waste management and sustainability processes, aiming to reduce its environmental impact. This includes initiatives to minimize food waste, use recyclable packaging, and improve restaurant energy efficiency.

McDonald’s Physical Evidence Strategy

The “Physical Evidence” aspect of McDonald’s service marketing and promotional mix encompasses the tangible and intangible elements that customers encounter, which contribute to their overall experience and perception of the brand. Here are key points regarding McDonald’s “Physical Evidence” in its service marketing mix:

1. Branding and Restaurant Design: McDonald’s iconic branding, including the Golden Arches, Ronald McDonald, and specific color schemes, is instantly recognizable worldwide. The design and layout of McDonald’s restaurants are also standardized to be welcoming and comfortable, reinforcing brand identity and ensuring a consistent customer experience.
2. Cleanliness and Hygiene: The cleanliness of McDonald’s restaurants, including dining areas, restrooms, and kitchen spaces, is critical physical evidence of the brand’s commitment to quality and hygiene. This aspect is especially crucial in the food service industry, influencing customer trust and satisfaction.
3. Menu Presentation: The way McDonald’s presents its menu, both in-store on digital screens and online through its website and mobile app, is an essential part of its physical evidence. Clear, attractive menu presentations with high-quality images and detailed descriptions help customers make informed choices and enhance their ordering experience.
4. Packaging: McDonald’s packaging is functional, keeping food items hot or cold as required, and also carries the brand’s visual identity. Sustainable packaging initiatives reflect the company’s commitment to environmental responsibility, an increasingly important aspect of physical evidence for customers.
5. Employee Uniforms: The uniforms worn by McDonald’s staff are part of the brand’s physical evidence, contributing to its workforce’s professional and uniform appearance. Uniforms also help identify employees quickly, adding to the restaurant’s sense of order and cleanliness.
6. Atmosphere and Ambience: The atmosphere within McDonald’s restaurants, created through lighting, music, and seating arrangements, is designed to be inviting and comfortable for a wide range of customers. This ambiance plays a significant role in enhancing the dining experience and encouraging longer stays or repeat visits.
7. Technological Touchpoints: The integration of technology in McDonald’s restaurants, such as free Wi-Fi, digital kiosks for ordering, and interactive play areas for children, serves as physical evidence of the brand’s commitment to innovation and customer convenience.
8. Signage and Wayfinding: Clear signage and wayfinding within McDonald’s restaurants help customers navigate the space quickly, from ordering to pick-up points and seating areas. This enhances the overall service experience by reducing confusion and wait times.
9. Customer Service and Interactions: Although not a traditional form of physical evidence, the quality of customer service and interactions with staff significantly impact customer perceptions of McDonald’s. Friendly, efficient service reinforces the brand’s values and commitment to customer satisfaction.

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