McDonald’s has been built on a strong vision and foundation. It has experienced many challenges along the way. But McDonald’s continue to fight back and tries to get into shape. Financial Times reported that McDonald's global sales rise 6. 2 per cent in April this year due to the increase in its European sales. “Sales of burgers, fries and salads have recovered in Europe in recent months as McDonald's has instigated a sweeping ‘re-imaging’ of 6,300 outlets there to encourage more customer traffic”.
Sales in Asia Pacific, the Middle East and Africa also rose to 6.5 per cent in April due to the initiatives of McDonald’s to introduce menu items which relate to the local cuisines around the region. (http://msnbc. msn. com) The new strategy for mcdonald’s McDonald’s may continue to be the leading brand for many years to come when it comes to brand recognition. But it may not sustain its product likeability for long. McDonald’s rank second to Coca Cola when it comes to brand recognition worldwide. But its rating drop to number 32 when it comes to likeability. (www. csmonitor. com)
The challenge that McDonald’s faces these days is how it can improve its sales performance and gain competitive advantage over its competitors and retain its strong global market. After identifying the market opportunities and assessing the marketing programs of McDonalds, it is now time to take a closer look at the most important element of the marketing environment – the customers. According to Kotler et al (2005), the aim of marketing is to somehow affect how customers think about and behave toward the organization and its marketing offers.
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It is therefore critical for McDonald’s to base its marketing strategies on the reasons and factors that influence the buying behavior of its consumers. The young generation not only in the US but all over the world has consistently been the primary target markets for McDonald’s. Global market cannot disregard the growing teen market today. It was reported that in US alone, the buying habits of teens was worth some $170 billion a year. The United Nations reported in 1998 that there were 270 million teens worldwide in the 15-18 age bracket belonging to this “new global teen” market.
(www. csmonitor. com) The loyalty of this market, however, has shifted. The global teens are no longer concern as much as they used to be with brands. Experts say that teen market go for brands that allow them to be part of a brand “story”. According to Chip Walker, executive vice president of Energy BBDO, the market-research firm that ran the study, called GenWorld, the “passion points” of the global teens are music, media, sports, and communication. (www. csmonitor.
com) According to Schuyler Brown, a trend-spotter and former managing director of Euro RSCG, an international marketing-service agency, politics play an important role too in the loyalty shift of teens. She believes that many teens abroad are developing a "new nationalism. " Many of America’s political moves has affected its hold on the global market specially on teens who have become more conscious with the political situations in their own countries. (www. csmonitor. com) It is therefore wise for McDonald’s to focus on the customer benefits of this new market.
According to Parry (2001), marketers must answer two questions: 1) what does matter – and what might matter to potential customers; and 2) On which of the things that matter to customers should I focus? These questions can be answered through the means-end theory, which explains why products and services have meaning for customers. Using these questions, McDonald’s can cater to the needs of its growing market. Below are some of the suggested strategies that would cater to the global teen market: • McDonald’s should improve the design of its stores to capitalize on the need of the young teens for places to hang out.
McDonald’s stores in Hong Kong were instant success since they created an image that it is trendy to be seen at McDonald’s. This strategy should be maintained and enhanced by McDonald’s in order to cater to the needs of the young market. According to Kotler et al (2005), the upscale American image, the freedom to order small items, the peer acceptance to share drinks, and the freedom to let one’s hair down legitimize McDonald’s as a place for young people to hang out with. • At the same time, McDonalds must maintain the localization of its services to each store.
Some teens especially from countries with very strong political stance are very critical when it comes to the influences of US. They regard the “McDonalization of society” with negative outlook. According to Peter Drucker, the purpose of a business was “to create a satisfied customer. ” This was supported by Ted Levitt, when he said that the purpose of a business is to create and keep a customer. McDonald’s is one of the many organizations that think this way. This is actually one of their corporate philosophies. However, analyzing closely this strategy of McDonald’s one would see that it does not follow its own philosophy.
Take for example McDonald’s attempt to copy the Whopper. In the summer of 1997, McDonald’s launched the “Quarter Pounder Big and Tasty” which bore a remarkable resemblance to the Whopper. In December of the same year, McDonald’s introduced the MBX (McDonald’s big Xtra) which promised 20 per cent more than the Whopper. This strategy contradicts the customer-focused approach since it focuses on the competitor and not on the customers. Analyzing and understanding the competitor is essential but should not be the main focus of McDonald’s marketing strategy.
(Parry 2001) McDonald’s should invest on R&D in each store to determine the real needs and wants of its customers. It should be more innovative with its products as well as maintaining the quality of its current products and services. McDonald’s should meet the changing needs and wants of its customers. It should be able to come up with menus as well as services that will bring satisfying experiences to its customers worldwide. This would mean being flexible and dynamic in each store considering the varied culture of people worldwide.
McDonalds should avoid the kind of product-orientation that blinds them to the changes in the benefits customers want. It is also important for every marketing strategy to focus on the benefits. Customers buy products or services for the benefits that they would get from buying them. Economist Ruby Norris (1941) as cited by Parry (2001), “goods are wanted because they are capable of performing services – favourable events which occur at a point in time. ” This was support by another Economist in the person of Lawrence Abbot as cited by Parry (2001), “what people really desire are not products but satisfying experiences.
People want products because they want the experience-bringing services which they hope the products will render. ” McDonald’s should erase its image of destroying the health of Americans and its global market. It should make drastic effort to change the its bloated image and come up with advertisements that appeal to the emotions of people and that contradicts its current bad image. McDonald’s should highlight the nutrients derived from its products as well as its efforts in keeping the environment safe.
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