Ch. 15 Retailing

Mc Donald’s is the No. 1 ranking food retailer. They almost make a monopoly of the fast food industry. And more than 80% of the restaurants are franchised by the local business people. Mc Donald's basic philosophy includes the good relation with the franchisees. Because the relationship with the franchisees is not good they can't improve quality, expand the market and increase the value. To open up a new Mc Donalds it can cost anywhere from $511,000 to $ 1 million. The form of franchise McDonalds uses is a business format franchising which is a relationship with the franchisor and the franchisee. The franchisee must meet with all the requirements of the franchise and the franchisor expects all the requirements to be fulfilled according to the restaurant.

Price is one of the most important aspects in the retailing mix. Mc Donalds is quick and affordable and that is what people want and need. The lowest price settlement brings huge benefit to the business. Mc Donlds’ sales rose dramatically by emphasizing on dollar menu options, such as Mc Muffins and coffee.

Also, location plays key role on Mc Donalds way to success. As we know from Chapter 2, Mc donalds key strategy plan is geographic advantage. The proper locations boost the company as well. The fact that McDonalds offers a drive- thru option is great for people who are on the go and are looking for quick meals. It makes it more convenient for drivers and that’s what people are looking for, something that involves low to no action on their part. Also, the practical location would be any place where there are lots of students or workers. They want something instant and on the way since we are usually all in a rush to get to their destination.

I recently went to the McDonalds that is right by our school on chambers street. Every single visiting, the store is all packed by the overwhelming people. I believe the success is due to their location and the price. We have a college and a high school right next to the location. Also, Tribeca is full of other busy business men and women. Consumers want diversity and not your average coffee and meals from a street stand. Also, the price of Mc Donalds is a big plus, because Tribeca is very expensive area, it is really hard to find a place to get a meal within 10 dollars. I am personally one of the big fans of Mc Donald's because they have good, cheap, various food and fast service. They are conveniently located in most areas, so it's really easy to find one. Most of time, I choose Egg Mc Muffin and Mc coffee for my breakfast, which just cost me 3 dollars more or less and it is literally FAST food that can be served in 1 minutes.

Ch. 6 - Consumer Decision Making

 

It is very important to understand consumers needs and wants and acknowledge how the individuals make purchase decisions. Consumer behavior plays such a large role in the success of Mc Donald's around the world. 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 continuing to sell "more than 75 hamburgers per second, of every minute, of every hour, of every day of every year.

 

How can they be so universalized? Why do people choose to spend their money and time at Mc Donald's? What do they buy? When do they buy? How do they buy? In this post, I want to thoroughly explore the consumers decision making process regarding Mc Donald's.
1. Need recognition
Brand recognition is almost the highest achievement in marketing. Mc Donald's remind the customers through mass media advertisements including television, radio, and newspaper ads, the company makes significant use of billboards and signage, sponsors sporting events ranging from Little League to the Olympic Games.

 

2. Information search
Mc Donald's is one of the first restaurant companies in the world to bring the calories data to their customers. Recently, McDonald’s has been launching a new global packaging design which incorporates QR codes to give consumers nutritional information about their food. Consumers can conveniently scan the QR codes through Smartphone to receive the nutritional facts anytime anywhere they want.
 
 
3. Evaluation of alternatives and purchase
McDonald's the most competitive strategy is that the buyer has a number of McDonalds in the area he/she could probably go to. Also, systematized food preparation methods ensuring standardized quality to satisfy those recurring customers. At last but not least, the reasonable price with perceived value plays significant role in customers decision making to finish purchasing.

4. Post purchase behavior
Mc Donald's customer satisfaction ranking is shocking. According to survey done by American Consumer Satisfaction Index, Mc Donald's earned the worst ranking since 2010. It is obvious to find that not all Mc Donald's consumers are "Lovin' it". But the company is still top-ranking franchise serving 68 million people daily.

Personally, I think, the company is dominant within its industry for a long time. As we know, burgers and hot dogs are "Cultural" menus for American, especially for Generation Y who grown up with eating Mc Donald's. Also, the company offers the most competitive price to the market. Since the value is a bigger lever than the quality, consumer satisfaction doesn't necessarily have to matter quite as much.
 

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Ch. 5 - Developing a Global Vision

McDonald's global sales continues to enjoy healthy growth, despite global economic hardships. There is no doubt that McDonald’s rapid global growth is based on intelligent and innovative business ideas based on the dynamics of the international business environments.
 

 

The company does excellent researches and understands its customers well. They attract more and more customers by giving them the values for which they are searching. Its menus and advertising both reflect the change in McDonald’s global marketing strategy. For instance, their ads usually push specific products or deals, many use situations aimed directly at ethnic consumers. For example, in a recent commercial called “Big Day,” a young boy at a wedding looks bored while watching the bride and groom kiss and jump over a broom—an African American matrimonial tradition. His eyes light up, however, when he gets to his seat and finds a Happy Meal. Moreover, they also started heavily advertising coffee drinks last year; the ads emphasized the indulgent aspects of sweeter drinks like mochas, to attract customers with certain specific preferences.  Neil Golden, McDonald’s US Chief Marketing Officer, says “The ethnic consumer tends to set trends, so they help set the tone for how we enter the marketplace and preferences gleaned from minority consumers shape McDonald’s menu and ad choices, which are then marketed to all customers”.