Ch 7 - Business Marketing

Strategic alliance, sometimes called strategic partnership, is "a cooperative agreement between business firms." McDonald's focuses on its strategic alliances with other firms and organizations. Through McDonald's and those cooperative organizations, they standardize the menu, expand the market and improve the value of company.

In this blog, I will analyze the relationships with outcome.


McDonald's Strategic Partnership

Nowadays, It is weird for us to eat burger without Coke beverages. McDonald's is the first fast food chain company who added the carbonated beverages as their main drink serving with burgers. In the business field, the strategic alliance of McDonald's and Coca-Cola is considered as one of the most successful relationships. These two giant cooperations have operated stably for many years. Obviously, McDonald's is the largest consumer of Coca-Cola. Although Coca-Cola sells drinks to other restaurants, its relationship with McDonald's goes far beyond other suppliers. Since Coke is sold in almost twice as many countries as McDonald's, Coca-Cola has also helped McDonald's to set up new operations around the world. 


McDonald's forms another formal alliance with Disney in 1997. Disney is so meaningful to families in terms of entertainment. Meanwhile, McDonald's also targets these kids and families. So it was a great chance for McDonalds to add the company value and promote the company itself. Since these two huge brand made the agreement, McDonald's Happy Meal toy line has tied in the Disney themes or movies. Disney toys brought big merit on Happy Meals and immediately boosted McDonald's sales. Some people even visit McDonald's just for collecting these toys. What's more, these collected Happy Meal Disney toys are sold by auction through the web in the pretty high prices.

Green Strategic Alliance

Strategic alliances with environmental groups increased consumer reliability in green products. McDonald's forms strategic alliance with the Environmental Defense Fund (EDF) to gain endorsements for products or clean up their image.

Ch. 8 - Segment and Target Marketing

McDonald's is one of the good examples for the market segmenting. Deeply focus on its consumers, all the products that McDonald's introduced are segmented according to bases of Demographic, Psychographic and Benefits etc. They have segmented their products and positioned their products according to kids, students and family. Also they haven’t started segment related to breakfast or cafe in every outlet.

In this bolg, I will segment McDonald's on three different bases.

1) Demographic Segmentation:  

McDonalds offers different products like Happy Meal which includes a free toy for kids. For families it has made different meals which are suitable for take-aways and drive-thru. McDonalds has made its environment which is fit for teens and Generation Y, which is mostly students, to hang out with their friends and can get their lunch at McDonalds.

2) Psychographic segmentation:  

McDonalds has adopted itself according to the convenience and lifestyle of the Its consumers. Since obesity become social problem, we lack of healthy and affordable food option. McDonalds came up with different and new product lines, which include items like McWrap and Fruit smoothie, to target the consumers who are health conscious.

3) Benefit segmentation:
Benefit segmentation targets group potential customers. McDonald’s has a Kid’s birthday party package. The package can range from about $5 to $15 per child plus a $50 deposit that is non-refundable if you cancel. Before the party starts, the employees set up the table with party hats and decorations. They take food orders and bring everything out together so no one has to wait. Also, they have playground for kids to have fun. McDonald’s birthday parties become really good deal for the parent-both-working families and families who pursue inexpensive cost.

Ch. 11 - Developing and Managing Products

PRODUCT MIX

In 1948, McDonald's started with just simple product items of hamburgers, cheeseburgers, french fries, shakes, soft drinks, and apple pie. While, they didn't only focus  on those limited items, McDonald's expanded their product mix width dynamically. They have introduced a lot of the new product lines, such as burger&sandwich line, McCafe line, chicken&fish line, salad line, breakfast line, snack and beverages and so on.

Recently, McDonald's made another product line extension. The company is launching a huge advertising campaign to promote the new product line called McWrap. McWrap is a "healthy" sandwich with low calories. One of the items in this product line is called The Sweet Chili Grilled Chicken McWrap which only contains 360 calories, 65% of Big Mac and 45% of Double Quarter Pounder. I think McWrap can be a healthier choice for many usual fast-food eaters as well as some who might not typically go that route. As a global brand, McDonald's also realizes the significance of the health problem, and they try to satisfy the individual's personal wants and needs.

The most profitable and popular product that McDonald's introduced is definitely McCafe. According to the reports, McDonald’s locations offering McCafe drink choices made 15% more profit than locations that did not. By starting McCafe, McDonald's is offering new products that were not available in traditional McDonald's stores. McCafe specializes in serving coffee beverages, which attracts customers that usually don't come to McDonald's to eat fast-food. Mc Cafe is also not only a product development. McCafe has its own section of the store and clearly distinguishes itself from the traditional McDonald store. The store has a modern, yet relaxing mood. This is important to attract new market segments. Perhaps customers who go to a cafe don’t go to satisfy hunger, but possibly to take a sip of coffee and chat in a relaxing environment. Thus, McDonald's McCafe serves as an example performing diversification by developing both new products and new markets. 

Ch. 16 - Promotional Planning for Competitive advantage

AIDA

Cooperation must be profitable. Boosting sales means improving the profits. No wonder that promotional strategy is key element in the marketing. McDonald’s is a front running company because they have great promotional planning and they are consistent. As textbook mentions, AIDA is the classic concept to push the consumers to make purchase decisions. In this blog, I will analyze McDonald's AIDA process for achieving their promotional goal.

1. Attention.

As McDonald's has a new product item comeing out, they do very heavy advertising on it through media, such as newspapers, magazines, television, large billboards and so on. Everywhere you go you will hear or see a McDonalds advertisement, and every Mc Donald's restaurant you visit, you can see the new posters promoting items. Accordingly, McDonald's grabs the attentions from the walking-by customers and potential consumers.

2. Interest

Their innovative items create interest to their products. One of the most revolutionary ideas is the $1 menu, which was a shockingly cheap price at that time. Actually, McDonalds premium coffee line has taken a huge business from Starbucks because it is much cheaper and tasty.

3. Desire

McDonald's usually sends out a lot of coupons to encourage product trial or repurchase, which attracts a lot of price buyers and recurs loyal customers.

4. Action

Mc Donald's is the leading worldwide burger retailer and food service retailer. The company states that they have sold over 100 billion hamburgers and are continuing to sell "more than 75 hamburgers per second, of every minute, of every hour, of every day of every year. It seems like their promotion is working well so far.