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McDonald Corporation: Company Marketing Strategy

Terms of reference

McDonald’s has started its journey in 1940 and they formed the McDonald Corporation in 1955 in California, USA with tremendous customers and worldwide goodwill (McDonald Corporation, 3). This paper has focused on Strategic Marketing Plan for McDonald Corporation’s brand the Burger King Corporation. Amongst scores of product line here outline of the marketing plan has grounded on “the Burger King Corporation” available in 71 different countries. Sales during last year were about $ 9.6 billion and ranked at third position.

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Recent McDonald Corporation’s market position is at the Maturity stage and they have been considered as one of the Market leaders in the food industry. An annual sale crafted by McDonald’s is $ 30 billion last year. The operation of their business abroad has been conducted mostly through franchising in 118 different countries around the world. Concentrate on Martin Haley’s approval, present portrait of the McDonald Corporation is staying in following areas-

  • Market segment: Job holder, business people, university students, homemakers, teenagers, etc;
  • Geographical area: All almost all over the world like- USA, UK, Germany, Australia, Asian Countries like China, Pakistan, Canada, Japan, and in the Middle East countries, etc.
  • Industry sector: it includes fast food manufacturers and sellers, restaurant business both in-home and abroad, small business, business event arrangement, etc.

Executive summary

As a part of the McDonald Corporation, the Burger King Corporation stayed at the third poison in the industry, acts as a co-market leader, and covered 32 % of market shares. They sales $9.60 billion and craft profit $ 190 million during last year (McDonald Corporation, p. 38).

Regarding continue present success, they need to transform a few aspects such as cut out prices to make available its products to all income level people, expand the product line and add different categories of product and services like- noodles, Bangladeshi and Indian dishes and finally try to establish these items in poor African countries (South Florida Business Journal, 1).

Business mission

The mission of “Burger King” is to make the meal easier and fast and discharge the appetite without consuming a longer time. They also pay attention to hygienic and proper nutrition containing in the food value though due to recession their sales value has decreased a little bit in Japan and Germany.

  • Innovation: continuously develop their product value; where necessary enlarge product line with health awareness
  • Customer service: it has available fast-food chain stores, restaurants, home service or takeaway service, online order facilities, etc.
  • Market: According to marketing, the market does not refer to any place, it is the probable target customers and for the BKC- homemaker, households, teenagers, students, job and business holders, business event, etc.
  • Market position: based on the financial data of the present market position, BKC has considered as one of the Market Leader (South Florida Business Journal, 1).

External marketing audit

External marketing audit involves in two broader forms- macro-environment and microenvironment:

Macro environment or PEST analysis

PEST factors include external environmental forces those have a great impact on customers, competitors and company capabilities. PEST forces are-

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  • Politics: Instable political atmosphere is one of the major obstacles for the Corporation such as Iraq, Pakistan;
  • Economics: rather than socialistic economic system, free market economy or capitalistic market is most warming and friendly for this Corporation like- USA, EU countries, Bangladesh, India, Middle East Countries and other countries stayed in the Asia Pacific Region.
  • Society: It fosters the three C’s- customer, competitors, and company capabilities, as conflicting society is always a contrary revelry for business growth therefore politically peaceful society is preferable.
  • Technology: technological development has to consider as tonic for the business development and for this reason, Burger King Corporation should adopt recent technologies in its product innovation.
 PEST factors.
Figure 1. PEST factors.

Microenvironment (market/competition): In the viewpoint of BKC the five forces are:

Five forces model

  • Intense segment rivalry threat: existing rival might be a threat for the corporation by offering low cost or by value added at same cost of products and services;
  • New entrants’ threat: same as existing rivals new entrants in the industry would make threat for them;
  • Substitute products threat: existence of the substitute products in the industry would be make obstacles in implementing mission of the Burger King Corporation (McCreesh John, 5).
  • Scope of buyers’ elevated bargaining power: bargaining power of the buyer involves in- low income of the buyer, absence of specialty in different companies products and services, high charge of the product, number of buyer is small rather than products and service costs;
  • Scope of suppliers’ elevated bargaining power: small number of suppliers and substitutes products, exists major differences in the existing products and services (McCreesh John, 5).
Five forces model
Figure 2: Five forces model

Internal marketing audit

Results: forces of results are :

  • Sales: Annual sales are about $9.6 billion during 2008;
  • Profits: net profit $190 million, which is 28.4 % greater than 2007;
  • Market share: obtain 32 % market share during last year (Brook Oak,);

Marketing mix evaluation (7 P’s)

  • Product: hamburgers, pizza, salads, French fry, chicken fry, milkshakes, breakfast, dessert, beverages, coffee and soft drinks;
  • Price: flexible for the middle, upper middle and upper class consumers;
  • Promotion: Print, electronic media, advertising in TV and Internet;
  • Place: they have 32,060 outlets worldwide.
  • People: it has about 400,000 employees;
  • Process: machine made products affiliated with experienced and skill chef they serve their products;
  • Physical evidence: It has satisfactory number of vehicles to provide home services.

Strategic issues marketing mix effectiveness

  • Market segment identification: it has followed market specialization philosophy that refers to- sufficient number of products for the different market segments (Hooley G., et al,);
  • Core competencies: it has adequate financing resources to invest in new places, smart outlets, capable to fulfill consumer demand;
  • Competitive positioning: compare to other McDonald Corporations, it placed at the third position and in aggregate form perform as a co-market leader.

SWOT analysis

Strengths:
  • Financial resource:last year profit is 190 million $
  • Employee:current number of employees is 400,000
  • Consumer:they are dealing with 47 million consumers daily (Potatopro Web Shop, 1)
Weaknesses:
  • Poor managerial depth:in Japan their starting is not sound as their assumption
  • Weak marketing strategy:sometimes marketing strategies do not work in new outlets
  • High cost: products are not available for all income level people
Threats:
  • Rivals:both existing and new rivals would be threat if they serve low cost products and services
  • Recession:global recession has effected its business in Japan and Germany
  • Substitute products:same featured low cost substitutes products are threat for them
Opportunities:
  • Market expansion:have a lot of scope to expend their business around the world
  • New investment:magnify their outlets in existing countries where they already continue their operation
  • Product line expansion:noodles, South Asian foods for dinner and lunch (Potatopro Web Shop,1)

 Marketing objectives

Strategic Thrust: requirement of this paper and based on the Ansoff Matrix three strategic trust of the BKC1 are as bellow:

  • Market penetration: transform the present third market position towards first
  • Market development: establish new outlets excepts the 118 different countries
  • New product development: have a bright future of Bangladeshi and Indian dishes
Ansoff Matrix
Figure 3. Ansoff Matrix
  • Target market(s): Comparative high-income people like- jobholders, business people, and medium level income people- College and university students, homemakers or households, teenagers, etc. (Potatopro Web Shop, 1)
  • Competitor targets: provide high-quality products and services rather than the competitors at a lower price.
  • Competitive advantage: third market position, high profitability, can apply of their business mission and strategic intents, customer and social responsibility, corporate ethics.

Marketing Mix decisions

  • Product: besides Burger and Pizza, it should include Asian spicy foods such as Indian dishes,
  • Price: its products should available for all income levels.
  • Promotion: after utilizing print and electronic media, they also equivalently advertise online or Internet,
  • Place: within 118 different countries, they have 32,060 outlets.
  • People: At present, they have about 400,000 dedicated employees.
  • Process: machine-made products affiliated with an experienced chef and they serve their products;
  • Physical evidence: it has a satisfactory number of outlets to go and eat and vehicles to provide home services.

Budget

The proposed budget in percentage for the marketing mix elements are in the following table:

The marketing mix elements
Figure 4. The marketing mix elements

Organization, implementation, control

Marketing structure information development: considering business mission, 7Ps of the marketing mix, Ansoff Matrix, SWOT analysis, and marketing objectives development of marketing information structure would be composed properly.

Timeline for the proposed marketing plan: within July 2010, as per the proposed recommendation of marketing plan for expansion of a new product line would be established.

Recommendation

  • Increase product line through Asia Pacific dishes like- Bangladeshi and Indian dishes
  • Make available their products in poor African countries
  • Decrease their product and service costs to be available for all income level people.

Works Cited

  1. Brook Oak, “Company Profile McDonald”, American City Business Journals, Inc.
  2. Hooley Graham, Piercy Nigel, & Nicoulaud Brigitte, The Set Text is Marketing Strategy and Competitive Positioning 4th edition, Prentice Hall, 2008,
  3. McDonald Corporation, McDonald’s Corporation: Annual Report 2008, Web.
  4. McDonald Corporation, Notice of 2009 Annual Shareholders’ Meeting and Proxy Statement.
  5. McCreesh John, “Strategic Marketing Plan 2010”, OpenOffice.org, Web.
  6. PotatoPro Web Shop, “Burger King Corporation”, Food Innovation Online Corp.
  7. Potatopro Web Shop, McDonald’s Corporation – SWOT Analysis.
  8. South Florida Business Journal, “Burger King, Wendy’s slip in popularity”, American City Business Journals, Inc.
  9. South Florida Business Journal, “Sales and Marketing, Sales tools”, American City Business Journals, Inc.

Footnotes

1 Burger King Corporation

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