McDonald Company's Buyer Behaviour and Marketing | Free Essay Example

McDonald Company’s Buyer Behaviour and Marketing

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Introduction

Founded in 1940, McDonald’s is the largest fast-food chain in the world with locations in more than 115 countries. It serves an excess of 69 million customers in its approximately 34,000 outlets, a situation that makes the company a global mega-corporation. The company has grown tremendously over the years to become not only the world’s largest fast-food chain but also one of the highly recognisable brands (Griskevicius & Kenrick 2013). The business started as a roast cafe owned by Maurice McDonald and Richard. In 1948, the McDonald’s recognised their business as a hamburger stand that used the “Speedee Service System”, which established the principles of modern fast-food restaurants.

However, Ray Kroc who became a stakeholder in the business in the mid-1950s as a franchise representative facilitated the expansion of the company into a worldwide business. The agent went on to purchase the company from the McDonald brothers (Hollensen 2007). Following the model introduced by Kroc, the company’s eateries are run by a franchisee, an associate, or directly by the business. The corporation obtains its revenues from the rent, royalties, fees paid by the franchisees, and from the company’s operational restaurants (Werth & Foerster 2007). In 2010, the company’s revenue stood at USD$ 24.08 billion. This figure grew gradually to peak at USD$ 28.11 billion in 2013 before shrinking to USD$ 25.41 billion in 2015 (De Vries 2008).

The company, which operates fast-food restaurants, offers various products that primarily include French Fries, chicken, hamburgers, cheeseburgers, soft drinks, shakes, breakfast products, and desserts (De Vries 2008). The menu has also been expanded to include other products due to consumer demands and tastes such as salads, smoothies, fruits, and wraps. The company’s target is wide and not limited to a single group. It targets the working class, families, and virtually all individuals who would like to have fast food.

Operating successfully in any industry requires companies to not only offer the products that are demanded by customers but also demonstrate the ability to determine and understand consumers’ buying behaviour (Oyserman 2009). Such an approach is very important since it allows a business to anticipate and prepare accordingly for the emerging consumer preferences and trends while at the same eliminating redundant business practices to guarantee the profitability of the company (Light & Kiddon 2009). However, the consumer buying behaviour is influenced by many factors, which vary from one industry to another. This paper will analyse the buying behaviour of consumers about McDonald’s as a fast-food chain of restaurants.

Psychology of Buying Behaviour

The market economy has two major players, namely, the buyer and the seller. The two parties interact with each other through a relationship referred to as a market exchange. Through this exchange, they assess and determine relative trade-offs that they must make to meet their respective needs and wants (Warner 2006). The seller or the company is guided by policies and objectives. For example, a company may decide to offer a given product only if it can bring a margin of +10% or greater (Kincheloe 2011).

On the other hand, the consumers or buyers have their policies and objectives, which guide their responses in the exchange. However, buyers do not have written principles and policies that can guide their decision to buy or not to buy a product. Sometimes, lack of understanding prompts buyers to behave in a particular manner when purchasing a product.

This aspect presents sellers with a “black box” of buyer behaviours that make the exchange process unpredictable and difficult for marketers to anticipate and/or understand (Kincheloe 2011). Despite the unpredictability of the buyer behaviours, marketers are very essential to the marketplace to the extent that they cannot be wished away by the seller. Hence, studies and theories to explain and understand buyer behaviour have been put forward.

Promotion of a company’s commodities and services initiates with the clients’ demands and reaches the climax when the extent of buyers’ contentment is addressed. Since this exchange revolves around the ability of the seller to anticipate and satisfy the needs of the buyer, the study of buyer/consumer behaviour is very essential and a necessity for sellers (Wright, Frazer, & Merrilees 2007). In the fast-food industry, consumers have a great variety of products and fast-food outlets to choose from.

Therefore, it becomes important for companies to persuade customers via various marketing strategies that have an impact on their buying (Wheeler et al. 2006). Accordingly, consumer behaviour is affected by various factors, which include cultural, social, personal, and psychological factors. In the study of consumer behaviour for McDonald’s, this study will focus on the psychological factors. The psychological factors that influence buyer decision include motivation, perception, learning, attitude, and personality.

Motivation

Motivation is a difficult term to define and apply in the marketing process, yet it is widely viewed as an important factor that influences consumer behaviour. The term emanates from the word “motive”, which refers to the inner drive or pressure to take any action to meet or satisfy a need. The application and research on motivation revolve around benefit segmentation and patronage motives (Wheeler 2012). In patronage motives, marketers are concerned with consumers’ reasons for deciding to buy a given product.

Under this classification, customers are viewed as convenience-oriented, price-conscious, and service-oriented among other motivating features (Ghodeswar 2008). Motivation requires one to be goal-oriented since he or she wants to achieve a specific outcome within a given timeframe. However, some goals are positive while others are negative. In the case of marketing, businesses desire consumers to be positively motivated towards a specific need that will drive them to buy the products on offer by a company.

The buying process begins with the recognition of a need, which can be met by purchasing a product or service. Motivation may be sought for convenience purposes, prestige. It may also be sought as a style, a source of self-pride, and/or to fit in with peers. If a business can understand the sources of consumer motivation, they can put measures and marketing tactics that will influence consumers’ motivation towards the company’s products and brand. In the case of McDonald’s, the company’s ability to understand what motivates consumers towards buying products can be an important strength of growing its market share even further (Wheeler 2013).

Currently, McDonald’s is recovering from a tainted reputation of offering unhealthy products. To motivate its customers, the company has a variety of healthy foods such as salads and smoothies among others, which offer an alternative to the “health-conscious” consumer. Further, the company motivates its consumers by offering cheaper services to attract the price-conscious customer (Espejel, Fandos, & Flavian 2008). Also, the company offers “fast” food for those on the go as a way of ensuring that the time-conscious individual is well served within the fastest time possible.

The concept of motivation is addressed by various theories. The most famous theory is Maslow’s Hierarchy of Needs by Abraham Maslow (Bruner 2009). The theory suggests that human needs are arranged hierarchically from the basic to the higher-level needs. In the case of McDonald’s, the company focuses on serving the lower needs, which are the psychological requirements that include health and food among others.

As a fast-food chain, the company seeks to serve healthy foods for all people (Lesser et al. 2013). The company also seeks to meet higher-level needs, namely, belonging requirements, by ensuring good customer relations where consumers can feel that they are treated with love and affection. The diagram below shows Maslow’s Hierarchy of Needs.

Maslow's Hierarchy of Needs. Source: (Bruner 2009)

Perception

Perception refers to the energy, which allows individuals to be aware of what surrounds them with the view of attaching meaning to it. Each human being has his or her sense of the surroundings. No two individuals perceive the world in the same way. From this point of view, all decisions to acquire something are based on perception (De Mooij 2010).

In this case, individuals are motivated to buy or not to buy a product based on the perception of the kind of needs they have and/or the products they believe can satisfactorily meet those needs. Consumers subconsciously respond to stimuli by evaluating their needs, values, and expectations (Bruner 2009). It is based on this understanding that the perception of brand or industry is very important. Hence, it cannot be ignored. Businesses must strive to ensure that the general perception of their products is as positive as possible.

McDonald’s values its reputation. The company has faced criticism from consumers and lobby groups to the extent of affecting its reputation over the years. For instance, it has been accused of poor employee environment and compensation, poor customer service, and unhealthy products (Shaw et al. 2012). However, the company is rising from this dark era. It has put in place measures towards ensuring that it has good employee relations. Further, it has focused on introducing new food products that are deemed healthier, thus slowly diffusing the criticism about offering unhealthy foods.

Currently, the company wants to build its brand to be perceived as a healthy and consumer-needs-conscious company that serves the best fast foods worldwide (Solomon 2014). The company appeals to the senses of its consumers through its logo and colours. The logo has red and yellow colours, which not only appeal to children but also create a sense of urgency. Further, the company uses uniform packaging and menu to ensure that customers have a sense of uniformity and that they are welcome wherever they are, whether locally and abroad.

Learning and Attitudes

Learning refers to the changes that occur in an individual’s behaviour from his or her experiences. The perception of a person is conditioned by prior experiences, which make up his or her preparatory set or expectations within which he or she places and organises new stimuli. In this case, based on prior experience, people seek to maintain balance and consistency by relating and interpreting new stimuli based on their perceptions and experiences (Sheth 2011). The link between learning and marketing is that businesses seek to build demand for their products by linking it (demand) to strong drives and motivating agents that the consumers can relate to.

Further, they seek to offer products that relate to their competitors in terms of the experiences that consumers expect, thus making it easier for them (customers) to move from one brand to another. McDonald’s uses various strategies to ensure that its customers learn about what it is offering. For instance, it tests the market and consumer experience before a product can be rolled over to other outlets. For example, a franchisee introduced the Big Mac. After it was tested and found to be popular with customers, it was rolled over worldwide. On the other hand, the company uses social media to advise the client concerning new offerings and products.

Personality

Personality defines the traits of an individual that make him or her unique. Two people cannot have the same traits. Thus, each individual’s personality influences his or her decision to buy a product. Sigmund Freud divides individuals into two major personality groups, namely, introvert and extrovert. The introvert is inner-directed and does not interact very much with others. On the other hand, the extrovert is outgoing, other-directed, and assertive. The two individuals respond to marketing strategies differently (Solomon 2014). For example, extroverts may prefer in-store assistance and personal experience for them to enjoy the shopping exercise.

On the other hand, the introvert may prefer to check information online or visit the online store. McDonald’s focuses on all kinds of personalities as a fast-food business. It capitalises on economies of scale by selling to all people of all ages (Lesser et al. 2013). The company upholds this strategy by positioning itself as convenient and fast when it comes to serving all customers. Brand personality refers to the human characteristics that a company and its services can be associated with. For example, as mentioned earlier, McDonald’s focuses on being well situated and reliable to its customers. Thus, it never fails them in the kind of food products they desire.

Justified Recommendations for Change

McDonald’s has been in business for a long time. This duration has made it develop a large client backing. Its large size and global reach have enabled it to utilise economies of scale to increase profitability. McDonald’s has a long way to go to recover from its previous reputation as the face of unhealthy food. However, so far, the company has made important strides that will drive it towards a reputable brand in its offering, employee relations, and services. In this case, the company should undertake various branding processes that will not only build its identity but also positively influence buyer behaviour.

Firstly, the company needs to ensure that it continues to research and introduce new products and services that consumers will deem healthier. Such a move will make the company gain a reputation of a healthy brand. Secondly, the company should focus on more advertising by utilising different modes of marketing such as social media and the mainstream media to reach a wider audience. Such steps will make the company gain more reputable brand identity in its locations across the world.

References

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