Global-autosaved-3.docx

Introduction: In 1917, 15-year-old Ray Kroc lied about his age to join the Red Cross as an ambulance driver, but the war ended before he completed his training. He then worked as a piano player, a paper cup salesman and a Multi-mixer salesman. In 1954, he visited a restaurant in San Bernardino, California that had purchased several Multimixers. There he found a small but successful restaurant run by brothers Dick and Mac McDonald, and was stunned by the effectiveness of their operation. They produced a limited menu, concentrating on just a few items – burgers, fries and beverages – which allowed them to focus on quality and quick service. They were looking for a new franchising agent and Kroc saw an opportunity. In 1955, he founded McDonald’s System, Inc., a predecessor of the McDonald’s Corporation, and six years later bought the exclusive rights to the McDonald’s name and operating system. By 1958, McDonald’s had sold its 100 millionth hamburgers.

A Unique Philosophy Ray Kroc wanted to build a restaurant system that would be famous for providing food of consistently high quality and uniform methods of preparation. He wanted to serve burgers, fries and beverages that tasted just the same in Alaska as they did in Alabama. To achieve this, he chose a unique path: persuading both franchisees and suppliers to buy into his vision, working not for McDonald’s but for themselves, together with McDonald’s. He promoted the slogan, “In business for yourself, but not by yourself.” His philosophy was based on the simple principle of a 3-legged stool: one leg was McDonald’s franchisees; the second, McDonald’s suppliers; and the third, McDonald’s employees. The stool was only as strong as the three legs that formed its foundation.

Some key Features to be the No. 1 System First: First and foremost, Kroc advocated adherence to the system approach. So while many of McDonald’s most famous menu items – like the Filet-O-Fish, Big Mac, and Egg McMuffin – were created by franchisees, the McDonald’s operating system required franchisees to follow the core McDonald’s principles of quality, service, cleanliness and value. The Roots of Quality: McDonald’s passion for quality meant that every single ingredient was tested, tasted and perfected to fit the operating system. Kroc shared his vision of McDonald’s future, selling his early suppliers on future volumes. They believed in him and the restaurant boomed. Again, Ray Kroc was looking for a partnership, and he managed to create the most integrated, efficient and innovative supply system in the food service industry. These supplier relationships have flourished over the decades. In fact, many McDonald’s suppliers operating today first started business with a handshake from Ray Kroc.

Values Our responsibility is our opportunity Using our Scale for Good plays an important role in the Velocity Growth Plan, and is right at the heart of our values in order for people to feel good about visiting us, they need to feel good about our food, our company and the impact that we have on the world. The world is changing. The population is growing, cities are expanding and temperatures are rising, stretching basic resources like water and food to their limits. These are complex challenges that demand innovative solutions and collective action. As one of the world’s largest restaurant companies, we have the responsibility and opportunity to take action on some of the most pressing social and environmental challenges in the world today. We embrace this opportunity to drive meaningful progress, and to do so by collaborating with millions of customers, employees, Franchisees, suppliers and other partners. These initiatives are most impactful when they go beyond the direct reach of our company to influence action both within our business network and beyond. We call this using our Scale for Good. We hope our efforts can drive real change, so they become tomorrow’s standard. It’s an ongoing effort, and we’re always looking to what’s next.

Food Safety and Quality McDonald’s mission is to serve safe and delicious food to our customers each and every day. Food safety and quality are at the core of everything we do, from farm to fork.

Fostering a Food Safety Culture: Food safety is about people, behaviors and attitude. At McDonald's, our food safety culture advancement effort includes everyone from our CEO to crew members. We have ongoing programs to educate employees about food safety practices, and our suppliers and restaurant

operators participate in food safety trainings where we share best practices on food safety and quality. Quality and Consistency of our Products: We have established three quality centers in North America, Europe and Asia to ensure that McDonald’s favorites such as our world famous French Fries, Chicken McNuggets and Big Macs always taste great and meet our rigorous standards. Through these centers, McDonald’s provides supplier trainings and assesses product quality. We have a robust menu governance process to ensure the quality, consistency and taste of our favorite food around the world. McDonald’s conducts ongoing product evaluations and supplier trainings, always striving to be better. In the Supply Chain: McDonald’s takes food safety very seriously. We have developed and implemented scienceand risk-based food safety standards based on best practices and food safety principles including Good Agriculture Practices, Supplier Food Safety and Quality Management Systems and the Distribution Center Quality Management Program. Our raw material and processing suppliers as well as logistic partners must implement and document compliance to McDonald’s food safety management system requirements. Compliance to these systems is verified by third party audits annually. Audit compliance is measured internally and we strive for continuous performance improvements year after year. At the Restaurants: Food safety standards are implemented at every McDonald’s restaurant. Restaurant food safety and quality management procedures are integrated into McDonald’s Operations and Training Program and based on Hazard Analysis of Critical Control Points principles. All restaurant crew members receive training on food safety and managers receive more advanced training on food safety. Daily food safety checks on key food safety standards and procedures are conducted in all McDonald’s restaurants. McDonald's verifies implementation of food safety standards at the restaurant level through internal or third party audits.

Management Orientation MacDonald’s management has adopted regiocentric orientation. In a company with regiocentric orientation a region becomes the relevant geographic unit. MacDonald’s management has developed integrated regional strategy. For a successful business in host countries McDonald’s had to customize its business strategy to the local needs. Regional strategy became important for McDonald’s they started their expansion in Asian countries as their culture is very different from western world. McDonald’s adopted product localization and innovations for new offerings based on local tastes and needs.

In 1963, McDonald’s introduced the “Filet-of-Fish” sandwich in the Cincinnati area for Catholics who did not eat meat on Friday. This was the first new offering added to the standard menu and went national the following year. The “Big Mac” introduced in 1968 was the brainchild of Jim Delligatti, one of the earliest McDonald’s Systems franchisees.The “Egg McMuffin” was developed in 1973 by McDonald’s franchisee Herb Peterson. A Canadian franchisee invented The McFlurry in 1997.They use chicken instead of pork and beef in India. They have introduced Maharaja Mac, McAloo Tikki in India suitable to local tastes and tradition. In year 2005 McDonald’s adapted Wi-Fi with the changing times and consumer demand with Nintendo in selected locations. They also started home delivery service in Singapore, where customer can place their orders on phone and have it delivered at their doorsteps. In busy places like malls, airports McDonald’s installed quick service kiosks rather than its standard freestanding units.

Culture Culture is one of the basic differences between nations. Culture is something we pick up from home, from our community, schools government, religious organization; it represents common features that unite us in one community and differ us from the other. Elements of one culture are language, religion, values attitudes, traditions, customs, habits material culture aesthetics, education, social institutions etc. These cultural elements also affect MacDonald’s Culture has tight connections with religion. In some cultures, religion influences everyday life to that extent that is inevitable in business too. When MacDonald’s started opening restaurants in Muslim countries, it had to obtain HALAL certificate that its food does not contain pork or any pork fat. Moreover, all the animals used in Muslim diet should be killed in one particular way, due to religious reasons. On the other hand, in India according to Hindu religion, cow is believed to be a saint animal. It means that there is no way to put beef meat on Indian menu. That is why MacDonald’s came up with a solution and developed Maharaja Mac- a burger with lamb meat. At the beginning it was not at all easy, there were many protests against MacDonald’s and its food and the company had to put additional effort to prove there were “no beef meat or any other beef product”. MacDonald’s management tries rally hard to suit all sophisticated tastes of its customers. Especially for India, it has developed vegetarian side of the restaurants, dividing the restaurants on two sides- green and red one. Green side is reserved for vegetarian dishes, while they prepare food with meat on the red one. Soon MacDonald’s became famous for its vegetarian dishes, such as the spicy MacAloo Tikka potato burger, Pizza McPuff and Paneer Salsa McWrap, which ist has become to introduce even in USA and Europe It has been known for years that MacDonald’s is trying to adjust its products’ taste to customers’ needs and habits. That is why you will find fried chicken on Asian menu more often than on other continents, in Latin America you can find a banana pie and in Germany they even sell a beer as a traditional national drink.

MacDonald’s is pronounced Ma-ku-do or Ma-ku-do-nal-do on Japanese. MacDonald’s aim to suit the customers, adjust their products to local markets and rise productivity globally. MacDonald’s does not only adjust to cultures, sometimes it changes their habits.

MacDonald’s Standardization & Adaptation Strategy The international success of McDonald's can be explained by their dual marketing strategy in going global. Some international companies make an effort to adapt their products to various different cultural environments and McDonalds is one of them. This marketing adaptation strategy enables the company to reach more consumers all over the world. But this strategy also means a higher production and communication cost so it is vital for the company to run serious market studies before entering a new country/market in order to understand the consumers' expectations first. We saw that McDonald's changes some of its products depending on the consumers’ way of consumption and their cultures. But other elements of the marketing mix can also be changed in order to best fit the country's market- the price, the promotion or the place of distribution.

Standardization Strategy McDonald's uses a strategy of standardisation by offering identical products worldwide, for example, the Mc Chicken, the Filet-O-Fish, the Happy Meal, the Mc Nuggets, or the Mc Flurry.

Those are products that everyone knows all around the world and that helped build the company's strong brand image. Offering the same products in all countries also enables McDonald's to create economies of scale and therefore save time and money.

Adaptation Strategy The strategy can be compared to localization. With this strategy, MacDonald’s adapts to the needs of the consumers as required by the cultures of specific countries. Adaptation works very well for MacDonald’s. the strategy enables the fast food chain to have a wider reach worldwide. An adaptation to consumers' cultures Let's travel around the world and discover examples of how McDonald's adapts its burgers to its consumers.

Germany

We start our journey in Europe, by going to Germany. Most Germans are indisputably meat lovers, and McDonald's has adapted its meals and menus to this kind of consumption. Here is a burger made with Nürnberger sausages. German people also enjoy drinking beer while eating, and it seems that McDonald's has understood this.

Indonesia Let's now fly to Indonesia- a country located in Asia. It has a population of more than 260 million people, with a large percentage who are Muslims. When McDonald's entered the Indonesian fast-food market, the menu was adapted to accommodate the eating requirements of Muslims, namely by deciding to remove pork from the menu. Instead of pork, a wider range of fish-based food is available. Moreover, all McDonald's restaurants in this country are Halal. Food consumption in Indonesia is very different than in the USA and in Europe, for reasons beyond religion. The national food eaten for almost all meals every day is rice. Consequently, McDonald's has adapted its menus and now offers rice. Here are examples of menus that include rice in McDonald’s restaurants in Indonesia.

Indonesians also really like spicy food, so in order to satisfy their clients, McDonald's also offers a large choice of spicy meals.

India We are now going to cross the Indian Ocean and stop in India- another Asian country. McDonald's offers a very wide menu adapted to the population of India. They replaced beef with chicken in their meals and even plan to open completely vegetarian restaurants, in Amritsar for example. As cows are considered sacred, the Big Mac became the Maharaja Mac. They also created the McVeggie and the McAllo Tikki for vegetarians who represent the majority of people in India.

At first India seemed totally incompatible with McDonald's core business and really looked like a difficult and risky market to enter for the American fast-food company, but the company took its time to analyse the market and understand the population's needs and tastes.

Morocco How about going to Africa now? We are going to end our journey in Morocco- a country situated in the Maghreb region of North Africa. Again in this country McDonalds has been able to adapt its offering to the local consumption. They sell sandwiches made with pita bread and traditional spices like cumin and coriander. During the Ramadan period, McDonalds also creates a special menu which is called "F’tor". F'tor meaning the end of fasting. This menu includes the traditional soup, dates, some milk and a BigMac.

PESTEL analysis Pestle is an analysis of the external macro and micro environment in which a business operates. Pestle stands for police, economic, social, technological, environmental and legal factors Political Factor The international operations of McDonald's are highly influenced by the individual country's policies enforced by each government. For instance, there are certain groups in India, Europe and the United States that clamor for state actions pertaining to the health implications of eating fast food. They have indicated that harmful elements like cholesterol and adverse effects like obesity are attributable to consuming fast food products. On the other hand, the company is controlled by the individual policies and regulations of operations. Specific market focuses on different areas of concern such as that of health, worker protection, and environment. All these elements are seen in the government control of the licensing of the restaurants in the respective states of the country. For instance, there is an impending legal dispute in the McDonald's franchise in India where certain infringement of rights and violation of religious laws pertaining to the contents of the food. The existence of meat in their menus in India is apparently offensive to the Hindu religion in the said market. There are also other studies those points to the infringement of McDonald's Stores with reference to the existing employment laws in the target market. Economical Factor Economic factors which impact on McDonalds include international, national, and local conditions due to it being a global brand. This means that the whole company was impacted by the 2008 economic recession due to its impact in the USA and Europe and the fall in disposable income, increased unemployment, and wage stagnation. The success of McDonalds is therefore reliant on a strong economy with low rates of unemployment. Falling sales can also be attributable to changing tastes and increased competition in the industry. The exchange rate also impacts on McDonalds and a weaker US dollar enables a better exchange rate and thus financial reporting. Technological Factor

The advantage of the web has opened up numerous opportunities doors for ease, high-effect showcasing over a scope of firms and businesses. Progressively, firms are being judged more strongly on their online presence. Showcasing open doors utilizing the web are numerous and fluctuated and can extend from multifaceted, included, multi-layered viral battles, through site outline and usefulness to a basic social networking presence. While the fast food industry was moderate to catch on to the benefits of web advertising in the first place, most firms have now grasped its potential and McDonald's is at the front line. Mc Donald’s became more prominent on the internet and showed their presence in number of social media like the Facebook, twitter and also McDonald have likewise run various effective online campaigns, including an 'Ask McDonald's YouTube campaign in 2012, where more than 20,000 inquiries from general society were replied, with most being based around the quality and production network of McDonald's nourishment and burgers. A significant number of the inquiries were replied through short YouTube features, some of which have accumulated more than 10 million views, and a large portion of which were gotten absolutely. Facebook Presence: They are active on FB from 2009 and have 56538766 likes as of April 2015. T w i t t e r : Mc Donald’s have 53k tweets and2.79 million followers. All these are really interactive with their customers. Introduction of Mc Donald’s touch screen kiosks, improved more user interactions on touch screen device kept in front of Mc Donald’s restaurant. Mc Donald’s Our Food Your Questions Campaign was also a good marketing approach from the company using the technology to make it responsive to users. There were around 6000 interactions in the site, and their answers included using pictures, videos and texts. All their questions were replied with videos on YouTube so it can be viewed to everyone. However, as with most other firms, the internet has ended up being a double edged sword regarding showcasing accomplishment for McDonald's. There have additionally been various negative articles posted on Facebook and Twitter about the organization and its items, including an undeniable fabrication post that asserted batch of McDonald's cheeseburgers in Oklahoma had been found to have been fed with 'human meat'. Such false data is effortlessly spread online with practically no data regulation; firms can be helpless before false allegations and web pranks. Additionally, in direct complexity to the fruitful YouTube campaign was a maybe less effective Twitter battle, where McDonald's advanced the #Mcdstories hash tag for twitter clients to post their stories and positive encounters with the firm, as there was no capacity to either control or appropriately cooperate with the reactions as with the YouTube battle, the crusade fallen very quickly with an excess of negative hostile to McDonald's tweets. Cautious observing of the organization's online presence and quick reaction to such incidence will go somehow to relieving the potential harm.

E n v i r o n me n t a l F a c t o r In recent times Environmental issues have become more focused with rise of more “Go green” and ecofriendly developments. Many organizations now include a lot of environmental friendly

activities Accordingly, numerous organizations now incorporate some type of natural harm relief to balance the negative ecological parts of their regular business creation systems; run of the mill strategies incorporate the replanting of trees to counterbalance carbon emanations created by the transportation of merchandise, a lessening in the measure of paper utilized as a part of the regulatory side of the business, vitality sparing activities, for example, the killing of lights, electrical apparatuses and PCs when offices are not being used, and a decrease in the measure of bundling utilized as a part of the generation process

Legal Factor Law too has a major impact on the businesses around the world. The legal environment of a nation has a deep effect on how well the businesses do there. If the legal environment is relaxed, the companies do better. The burden is less in such environments. Compliance is an important factor. There are several nations where bureaucracy and red tape make it difficult for the brands to operate profitably. When compliance becomes the bigger issue, brands find their focus shifting. It is why in many nations where the laws are complex, foreign brand find it difficult to make an investment. Indian laws are not very open towards FDI (Foreign Direct Investment). If the legal environment of a nation is favorable brands operate both safely and profitably. Otherwise taxes and compliance related factors can make it so difficult that the brands find it impossible to do business profitably. Slowly, the Asian countries have started relaxing their laws to invite foreign brands. Such an environment will make it easier for brands like McDonalds to earn their profits and deliver their services. Poor state of law also leads to the difficulties. Several nations still do not have well development employment laws. In such environments employees may find themselves at the receiving end. This is not very good for the big brands either since they will experience a high turnover rate.

Corporate Social responsibility In every single nation, McDonalds has flourishes to build up a menu that fits the tastes and society of the individuals in those nations. This has made McDonalds one of a kind in its giving of fine and quality fast food items. Its CSR methodologies have helped it to distinguish the needs of the individuals inside these destinations and grow fast food arrangements that best fits their needs. McDonalds is accordingly aware of its clients' differing needs. Also, McDonald’s endeavors to advance solid restaurant regimens that advantage its client. Examination uncovers that fast food items are bad for the wellbeing, particularly for the heart and the liver. In any case, McDonalds question this by creating and making fast food items that are free from cholesterol, fat that causes cardiovascular diseases. McDonald’s primary qualities are all away for promoting the Corporate Social Responsibility of the firm. This is increased through giving quality to the customers, the network and supply main business assistants with whom McDonalds cooperates. McDonalds doubtlessly perceives the way that its customers are the reason for its success and presence. Thus, the customers are all that abundantly regarded inside the association. The association in this way attempts to make a warm and welcoming environment for its customers. McDonalds being an open organization qualities doing profit business with every one of its partners. The organization thusly lays much accentuation on beneficial business while upholding

its business ethics over every one of its auxiliaries. This is attained to through keeping up high ethical benchmarks. McDonalds is constantly dedicated to the wellbeing of its clients through delivering fast food items that have no bad effects for the customers. The organization takes after the strict check of its nutrition specialists. There have been worries about obesities that McDonalds has considered important and strived to abstain from delivering fast food items that may prompt weight among its regular customers. McDonald’s advices client to settle on quality decisions in regards to its fast food items that will advantage their health. The firm discourages eating for the purpose of it and demands supporting solid living. McDonalds keeps on developing astounding and a very much balanced eating habits that serves the needs of its customers extensively. The firm has likewise built up an extensive variety of decisions to empower its clients to browse in their menu, along these lines expand consumer loyalty. According to, (Energy Star, 2014) McDonalds has won the Energy Star Partner of the Year honor which is typically recompensed by the Environmental Protection Agency (EPA). McDonalds has been perceived for its gigantic endeavors in decreasing greenhouse emissions. The firm is connected to nature and concerned all the more about the unnatural weather change. This has elevated the firm to save money on vitality and accordingly deflect carbon emission. The organization has kept on focusing on enhancing its dedication towards nature. The extent that McDonalds CSR in regards to nature is concerned, the fast food titan has in the different times concentrated on three fundamental ranges in particular; Energy productivity, economical packaging and waste management and green restaurants plan. McDonalds has sort to utilize more vitality effective methods, for example, the utilization of regular gas in the fast food restaurants. Using of cooked oil converted to gas. McDonalds keeps on seeking methods for expanding vitality effectiveness. Moreover, the fast food goliath likewise looks to decrease the effect of its operations on the ecological effect. Along with this 30% of the electricity used in Mc Donald’s comes from renewable credits from U.S wind sources. Along with this they reuse the condensation of air-condition for cleaning external areas and watering the plants and thus reducing the water usage by 15%. In UAE, Mc Donald’s complete trucks runs on 100% biodiesel made from vegetable oil reused from Mc Donald’s kitchen. For a really long time, McDonalds has been supporting the Olympic Games through sustaining system went for encouraging the games. McDonalds is likewise included in different foundations furthermore underpins training in the creating nations where it has its establishments and fast food restaurants. As a feature of its offered to return back to the general public, McDonalds has supported a few youngster’s projects including removing of illiteracy and poverty. (Mc Donald’s, 2014) states the board believes that great administration is a journey, not a destination. In like manner, they are focused on looking into our administration standards at any rate every year with a perspective to constant change. One thing that won't change, then again, is their dedication to guaranteeing the honesty of the McDonald's System in every one of its dealings with partners. The board believes that good corporate governance is required to fulfil the organizational obligation to shareholders. The board believes in honesty, ethical manner and being fair. They build the trust by being ethical and dependable and truthful to its customers and employees. Along these lines, McDonald's has developed to turn into the world's biggest fast food chain of restaurants through its dedication towards accomplishing its CSR and additionally keeping up great business ethics.

MacDonald’s Growth strategies As McDonald is a company with ever changing products of its types. It needs to innovate its products on continues basis for this purpose; one of the most suitable marketing models for the company is Product/Market Growth Matrix.

McDonald’s Product/ Market Growth Matrix

Existing Products

New Products

Market Penetration

Existing Markets

 Hamburgers, cheeseburgers, chicken products,  French fries, breakfast items, soft drinks, milkshakes and desserts.  More recently, it has begun to offer salads, wraps and fruit.

Market Development New Markets

 Uruguay  Venezuela  Yemen

Product Development  Innovation in all products, Introduction of new products (Brands)

Diversification  Pret A Manger  Chipotle Mexican Grill

McDonald Corporation often uses product/market growth matrix’s growth strategies, to focus on the firm's present and potential products and markets & customers by considering ways to grow via existing products and new products, and in existing markets and new markets. There are four possible product-market combinations of product/market growth Matrix of McDonald’s are given. McDonald is often being involved in applying all product/market growth Matrix four different growth strategies in the different markets round the globe as under: McDonald is one of the most famous brands for providing innovations but even in this ever changing and innovative era it keeps its products same in the same market but this happen for a very short span of time (Even maximum a month). The results of firm's existing resources and

capabilities remain secure and the firm increases market share if competitors reach capacity limits.

Product Development Strategy McDonald’s Corporation has always provided new and new innovations to its customers. It always has provided a handsome level of consumer economic surplus to its customers. McDonald’s always seeks innovation from one market and provided these innovations and new products to the rest of the world. This strategy does have a minimal level of risk which almost always have provided good results to the organization for keeping the strength in its 47 million customers averaged daily existing customers. The Macdonald's growth strategy is the secret of organization's success.

Market Development As we all know that McDonald's is a Global organization and it has the franchisee FDI system to reach the new global markets of work in its international business. It has more than 31,000 business outlets (franchisees) in 119 countries round the world and it always pursuit the additional market segments on geographical basis. As the firm is expanding into new markets; the market development strategy typically has more risk than a market penetration strategy for McDonald’s but the developments of new markets have been proven significantly successful for McDonald’s core competencies of its experience with a specific market segment. Diversification Diversification is not the best of the idea for the company because it can’t afford to make new products in the new markets. It’s actually not possible with the franchisee system that McDonald’s adopts. Keeping aside from Franchisee system McDonald has also proved success in this strategy by owning a majority stake in Chipotle Mexican Grill&Pert A Manger and acquiring Donatos Pizza. McDonald’s adopted both product and market development strategies which was outside the core competencies of the firm.

Segmentation, Targeting & Positioning McDonald’s is the world’s leading global foodservice retailer with a presence in over 35,000 locations and serving over 70 million customers in over 100 countries every day. Known for its delicious hamburgers, McDonald’s also offers different types of chicken and beef sandwiches, French fries, breakfast items etc. McDonald’s modify its menu and offerings basis the region they are operating in, so as to suit the regional customers taste and needs.

E.g.: In India, McDonald’s does not serve beef products and lay equal emphasis in promoting their non-veg (chicken) burgers and Veg burgers. In USA, McDonald’s is famous for its Beef burgers. In this article, we will talk about the Positioning of McDonald’s and how it segments and targets the market and then position itself differently for each market segment.

Segmentation Market segmentation is the process of dividing up mass markets into different groups of similar needs and wants. The motive behind segmentation is Get to know the customer in a much more detailed manner, gain a competitive advantage and be able to serve the customers’ needs and wants in a better way. McDonald’s uses different types of segmentation to break a bigger market into small customer groups. Geographic Segmentation Geographic segmentation divides markets according to geographic criteria. McDonald’s breaks its business into different geographical segments like 1. 2. 3. 4.

America Europe Asia/Pacific, Middle East, and Africa Other Countries (like Canada, Latin America)

On the basis of their geographic segmentation, McDonald’s optimizes its menu and food offerings to suit the regional tastes and needs. McAloo Tikki and McVeggie are available in India. Bacon Smokehouse Burger and Quarter pounder (beef) burger are available in the USA McArabia Chicken and Beef Burger are available in Arabian countries. Demographic Segmentation Segmentation according to demography is based on consumer- demographic variables such as age, income, family size, socio-economic status, etc. MacDonald’s use to make products for the people of different ages and different price lines having low and high incomes as well McDonald’s mainly segments the market in below demographics: 1. Children: McDonald’s offer a lot of goodies, toys, happy meals etc. to attract this younger segment audience. 2. Young Adults (Age group between 18-29): Without much thinking, this segment is the main source of income for any business, let alone McDonald’s. This market segment may be having a

disposable income which is lower than the average, their consumption patterns are far much more than old the other market segments. 3. Adults: The third segment is the adults’ segment, in order to target this segment, McDonald’s tweaked its menu and made its offering less in calories and healthy. Psychographic Segmentation MacDonald’s use to have some changes in their menu while having a franchise with new countries. They analyze the culture and religious atmosphere of the country at first and modify themselves accordingly. MacDonald’s menu for America altered then the MacDonald’s menu for India.

Targeting: After segmentation, the company needs to decide on the Targeting strategy. Companies need to select the market segments that they want to focus on and put in their future business strategy. Below are three factors that are essential for evaluating a potential market segment.   

Segment size and growth Segment structural attractiveness Company objectives and resources.

Above mentioned are the few potential market segments that McDonald’s chooses to target for driving their business strategy, sales and marketing activities.

Target Marketing Strategy McDonalds uses both an undifferentiated segmentation and a concentrated (niche) segmentation strategy. The concentration strategy is shown by the example of McDonald’s branches in the maritime that offer the McLobster. This is the company using one item to appeal to specific group using demographic segmentation. Undifferentiated segmentation occurs in each individual province and territory because the McDonald’s located in each province and territory will serve the same items from the menu to appeal to the masses. It is not only the items on the menu that attract customers to go to McDonald’s. They also go because of the convenience and low price that is offered for most menu items. Another recent movement that McDonald's has promoted is an active/healthy lifestyle trying to appeal to people that lead those live individually. Offering nutrition sheets on trays that display all nutritional value of everything on the menu would appeal to someone who wants to know how much of a certain molecule they are taking in. In also encouraging an active lifestyle it could promote customers that do not lead an active life to maybe start going to the gym and lifting weights or going outside and going for a run on a nice

Positioning The positioning strategy of MacDonald’s was outstanding since the initial stage. They had developed a unique image in the mind of consumer’s; they use to develop alternate positioning strategy for the different target markets in comparison to other competitors. The original mascot of MacDonald’s was a man with a chef’s hat on top of a hamburger-shaped head whose name was “Speedee”. Speedee was eventually replaced with Ronald MacDonald’ by 1967 when the company first filed a U.S trademark on a clown-shaped man having puffed –out costume legs. The clown got much popularity among children. MacDonald’s has for decades maintained an extensive advertising campaign. In addition to the usual media like television, radio and newspaper, the company makes significant use of billboards and signage, sponsors sporting events ranging from Little League to the FIFA World Cup and Olympic. They also use the local advertising channels of the particular place

MacDonald’s Marketing Mix McDonald’s Corporation’s marketing mix (4Ps) involves various approaches that meet business concerns in different fast food restaurant markets around the world. The marketing mix defines the strategies and tactics that a company uses to reach target customers, in terms of products, place, promotion, and price (the 4Ps). In this business analysis case, MacDonald’s has corporate standards that its marketing mix applies globally. For example, the company’s corporate standards for productivity are implemented in the management of each company-owned and franchised location. McDonald’s also applies some variations in its marketing mix to suit the conditions of local or regional markets. For instance, the company’s promotion strategies and tactics focus on print media in countries where such media are most popular, and prioritize television in other markets. The specifics of the 4P variables define the various strategies and tactics that McDonald’s uses in executing its marketing plan and achieving related strategic goals to grow the multinational restaurant chain business. McDonald’s Corporation’s effectiveness in implementing its marketing mix contributes to the leading performance of its brand and business in the international fast food restaurant industry.

McDonald’s Products (Product Mix) As a food service business, McDonald’s has a product mix composed mainly of food and beverage products. This element of the marketing mix covers the various organizational outputs (goods and services) that the company provides to its target markets. McDonald’s product mix has the following main product lines: 1. 2. 3. 4. 5. 6.

Hamburgers and sandwiches Chicken and fish Salads Snacks and sides Beverages Desserts and shakes

7. Breakfast/All-day breakfast 8. McCafé Among the 4Ps, products are a fundamental determinant of McDonald’s brand and corporate image. The company is primarily known for its burgers. However, the business gradually expands its product mix. At present, customers can purchase other products like chicken and fish, desserts, and breakfast meals. McDonald’s generic strategy and intensive growth strategies influence the product lines included in this element of the marketing mix. In diversifying its product lines, the company satisfies market demand, improves its revenues, and spreads risk in its business. In terms of risk, a more diverse product mix reduces the company’s dependence on just one or a few market segments. This element of McDonald’s marketing mix indicates that the firm innovate new products to attract more customers and improve its business stability.

MacDonald’s Prices & Pricing Strategies McDonald’s uses a combination of the following pricing strategies: 1. Bundle pricing strategy 2. Psychological pricing strategy In the bundle pricing strategy, McDonald’s offers meals and other product bundles for prices that are discounted, compared to purchasing each item separately. For example, customers can purchase a Happy Meal or an Extra Value Meal to optimize cost and product value. On the other hand, in psychological pricing, the company uses prices that appear significantly more affordable, such as $__.99 instead of rounding it off to the nearest dollar. This pricing strategy helps encourage consumers to purchase the company’s products based on perceived affordability. Thus, this element of McDonald’s marketing mix highlights the importance of bundle pricing and psychological pricing to encourage customers to buy more products.

MacDonald’s pricing decision Despite the cost savings which is characteristic of standardization, implementation of McDonald’s price strategy is localized rather than globalized. McDonald’s has different pricing for different countries. Each country undergoes a strict process to determine the price for a particular market. The process is:      

Selecting the price objective Determining demand Estimating costs Analyzing competitor’s costs, prices and offers Selecting pricing method Selecting the final price

The process above is the basic framework that McDonald’s uses to set up localized pricing.

McDonald’s pricing objective is to increase market share McDonald’s mission statement highlights its pricing policy; the most fundamental element of determining price was: Being in touch with the price of our competitors allows us to price our products correctly, balancing quality and value. For instance, to penetrate the market in New Delhi, India in 1996, McDonald’s set their price by looking at Nirula, a local food chain. As another example of the ‘glocalisation’ phenomena, McDonald’s also sets prices according to the product life-cycle the US market was in the decline stage of the PLC so the price of a Big Mac was lower than that of in Japan. The Japanese market was growing to maturity so a high priced Big Mac was profitable.

MacDonald’s Promotion Strategy McDonalds as we all know is one of the leading fast food chains across the globe. The slogan ‘I’m loving it’ is even more popular in many celebrities to the masses around the globe.BurgerKingholdingamarketshareofover15%amongothertopfastfoodfranchiseslike KFC, Burger King, Hardees, etc. Understanding McDonalds marketing strategies is very varied and includes diverse research in various strategies implemented in different countries. McDonalds has successfully taken their most popular product-The Big Mac, a cross most of their markets in today’s world. This success story emerged out of creating a brand name for itself with its early modernization into the minds of the consumers. The advertising objective of the company, simply put is to make the consumers aware of an item, like it and remember it. McDonalds have till date, successfully conquered most of their markets with a wide range of products, but the Big Mac has created an entirely different era in the sales for the company. McDonalds follows five different promotion strategies for almost all their products including The Big Mac, being altered for different markets Sales Promotion Sales promotion basically consists of conducting and encouraging activities that promote McDonalds through various contests ,programs, functions and distribution of free coupons, which help in the attraction of its consumers.-Various contests like ‘the happy family moments’, ‘coast to coast’, ‘NFL love’ have increasing boosted their sales and market share by creating an awareness of the brand and instilling it in the minds of the consumers.-These promos and contests also go live on twitter and other social media networks that raise attention of the brand day by day. Public relations The public relations play’s a very silent et vital role in the marketing and promotion of the products at McDonalds. Increasing credibility of the brand and increasing value are two important determinants in creating a sustainable market which has been achieved by this company. - Creating employee customer relationship has always been something that

McDonalds hasn't failed in. They know that the attitudes and behavior of their employees serve a huge role in today’s market. -Public relations of the company help them market their most popular product by merely stating the nutritional facts, the need and desire that will enhance customer satisfaction. Direct Marketing Direct marketing as the term suggests, is a method of directly marketing to your consumers by means such as telephone marketing, E-mail based marketing, online marketing, etc.-McDonalds aim mainly at being immediate, customized, interactive and well suited to highly targeted markets. The online websites that McDonalds hosts to different countries offers direct information to the consumers on their diverse products and services, giving the consumers sufficient knowledge about their products and deals. Home Delivery system also works in an effort of direct marketing as they serve the consumers need by delivering the products directly to their houses being one of the very first success food chain to do so. Personal selling Personal selling acts as a direct tool in building the consumer preference, suggestions and feedback. Since personal selling involves customer feedback directly to the employees of McDonalds they treat this mode of promotion very high and valuable. In McDonald’s achieving personal selling means to have a good relationship with customers even for the few minutes that it takes to place and order and serve it. McDonalds keeps account of even the smallest of detail to ensure their customers are happy and satisfied. Face to face communication that is encountered in personal selling gives the employee time to create a good impression of the company which is considered of great importance to the Marketing department of McDonalds worldwide. Advertising An advertisement is targeted to attract the masses of people at an instance of time. Being one of the most popularly used method so promotion by most of the companies around the globe, advertising has yielded higher fruits than most of it so the promotion strategies for McDonalds. Consumer normally buys what they see and that is the ultimate goal of advertising. In the form of billboards, media, print ads, television commercials and online commercials, McDonalds have surpassed most of their competition. The Big Mac, McDonalds most bought product worldwide has had over millions of advertisements located across cities around the world. Celebrity Spokespersons have also played a great role in the branding of the product and the franchise into day’s world. Celebrities like Michael Jordan, Venus Williams, Samuel Jackson, Kobe Bryant, Larry bird, Justin Timberlake and so many more have played an influencing role in the perspective of the consumer. Standing as the official sponsor of the FIFA world cup in 1994, the National Football League in 2012, The Super Bowling 2013, The Nascaring 2008, NBA, Olympics, etc. are many segment cleverly attacked and conquered by the company in a nearly stage taking them to where they are today.

Product Development and Marketing As mentioned previously, product development and marketing can and do occur at a local level in McDonald’s international countries. These are the only two major business functions that McDonald’s Corporate allows some flexibility by deviating from the tight grasp that they hold over international restaurants. Now, that is not to say that the countries and local markets have complete freedom to add to the menu and promote their products how they wish. McDonald’s prides itself in the consistency of its products and taste around the world and would not allow complete autonomy. Instead, it means that some of the lengthy, tedious, and idea crushing control that corporate normally holds over its franchises is lifted slightly and can occur at the country level as opposed to corporate level (Appendix C). To look at the impact this has on the international outlets, a closer look at product development and marketing will each be analyzed. Each local country has the autonomy and authority to develop its own products to address unique tastes that their consumers have. It is the sole responsibility of the individual country to complete the marketing research and develop new menu items. Once that has occurred, the information is then studied and approved or rejected by the corporate offices depending on the extent of favorable data available. Where there is limited involvement from corporate in the development process, there is still heavy involvement in the acceptance process. This involvement from corporate is only increasing, as the international markets become more important to McDonald’s overall business. However, according to Den Fujita, President of McDonald’s Japan, when McDonald’s first entered Japan, corporate was relatively accommodating to the new menu items that were presented to them, and as a result, acceptance in Japan was expedited5. There are many examples of item adjustments that have been made around the world over the years to address local tastes and preferences (Appendix E). The menu changes resulted from many different reasons such as cultural, religious, taste preferences and translation reasons. Some specific examples are in India, there are no beef items served throughout the country, so McDonald’s added the “Maharaja Mac”, a lamb version of the standard “Big Mac”. Other examples include Germany, where McDonald’s serves beer with meals and in Cyprus, the McNistisima menu was adopted for the lent period between Easter and Christmas and consisted of veggie burgers, country potatoes, and shrimp and spicy rolls14,16. Occasionally, new local menu items might not seem like a logical choice for a country and are protested accordingly like when McDonald’s was going to recently add meat bowls over rice. Heavy protesting occurred until the launch of the items. However, on the first day the bowls were available, they sold out entirely proving that local marketing research and flexibility can benefit the company13. The marketing of international restaurants is handled with the same process as product development. Locally, the countries develop and test market ideas that differ from the corporate worldwide message. Any differences in the core message are then presented to the corporate office for approval. Marketing overseas, like product development, is mostly handled away from the corporate office. There are many reasons why the core marketing message would change, including; translation reasons, cultural differences, customer target differences and the fact that the product itself being marketed might not even exist in the company’s core message. A specific example of a country differing the marketing message from corporate took place in

different countries that use the metric system. Instead of calling their burger the “Quarter Pounder”, the European countries market their burger as either the “Royal Hamburger” or the “Burger Royal.”

Conclusion In order for the international division of McDonald’s to continue the impressive success that it has achieved in the past, two major areas of concern must be addressed. The increasing level of saturation in most of the major markets around the world and the struggle over autonomy between corporate and the franchises must be addressed with extreme urgency and by allocating the resources necessary. Competition in the fast food industry is becoming incredibly saturated. When McDonald’s first began expanding into international markets, their main focus was altering eating habits. This was primarily because there was an absence of major competitors overseas. However, over the last decade, the international market is beginning to mirror that of the heavily saturated United States market. Profits are shrinking, same store sales are down, and the overall market growth has slowed tremendously. This has prompted McDonald’s to continue to cut costs by announcing the closing of 175 under performing outlets in 10 countries. As the international markets become more competitive and saturated, McDonald’s must continue to analyze and make adjustments accordingly. Although saturation is a growing issue overseas, it was noted earlier that foreign operations are now more than ever, a major element of the McDonald’s Corporation business. As a result there is a constant battle over autonomy. The franchises, especially the experienced outlets with over a decade of success, want more autonomy to adapt to local tastes and preferences. The franchises feel that as the market becomes more competitive, it will be vital for alterations and adaptations to occur faster and easier than they ever have in the past. However, McDonald’s corporate is on the opposite side of the issue and is not budging. Corporate feels that control must be at an all time high because of the importance of the international division and the fact that if it fails, the whole company could suffer as a result. Corporate has tightened the reigns consistently the last few years and will continue to do so to stay afloat by turning the losses into gains.