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.

Ch. 10 - Product Concepts

PACKAGING

Product is everything consumer received as exchange. For a restaurant business like McDonald's, the product can be directly affected by packaging, size, option, service and the seller's image etc. Nowadays PACKAGING is not the only function for containing and protecting products any more. McDonald's is one of the smartest companies that make fully use of packing functions.

1. Promote products.

Through the package design, they influence the consumers perception and buying behavior to improve the purchase power. For example, recently,  Mc Donald's tell their brand story and promote the products to the buyers through the new bag packaging. This is another way to conduct Public Relations to build up a better company image.

2. Facilitating storage, use and convince.

Consumers are always seeking for items that are easy to handle and open. This April, Mc Donald's introduced a new entree line- McWrap which is served in a hand-held package. This easy-to-eat packaging attracts a lot of consumers who are living a on-the-go busy lifestyle.

3. Facilitating recycling and reducing environment damage.

As reported, currently 82% of Mc Donald’s consumer packaging is made from renewable materials. They also switched to unbleached paper napkins made from recycled materials. They were concern about the environmental issues, and made more effort on eco-friendly packaging to save nature.

Ch. 18 - Sales Promotion and Personal Selling

Sales promotion has played an important role in speeding the pace of business development. Especially for a company like Mc Donald's, advertising and sales promotion is more important because their product is very standardized and low-value. Through the promotion, the potential consumers would gain the information and make immediate purchase without deep consideration.

Objective of Sales Promotion

When you see the Mc Donald's advertising in the street or on the screen, you can easily find that they don't really emphasize the relationship that develops  with consumers. Most of the commercials are product-oriented. They want more effect on the behavior than on attitudes. 

Mc Donald's sales promotion is targeting loyal costumers and price buyers. The company frequently  bring new products and deals so that their their loyal customers  won't get tired of their menu and come back for repeat purchase. Also, for those  who consistently buy the least expensive food, Mc Donald's will be the best choice especially when they are on sales promotion. I usually  pick up an Egg McMuffin on my way to work or school. Because Mc Donald's has a promotion - "Egg McMuffin 2for $3". This is a typical "grab and go" meal and it is very cheap and fast. Plus, it tastes so delicious.

Ch 17 - Advertising and Public Relations

McDonald’s uses every form of advertising out there; Newspapers, magazines, radio, television, outdoor media and television. Everywhere you go you will hear or see a McDonald’s advertisement. Some people might think nowadays McDonalds' doesn't really need to do the advertisements since they are everywhere with the prominent signage in red and yellow. Well, this doesn't happen by accident. McDonald’s has been one of the largest advertisers, they built over many years by heavy advertising and marketing investment. 

McDonald’s mostly uses product advertising. They usually push specific products or deals. Previously, their advertising tends to be more product-oriented and picture-oriented. Today, however, McDonalds also uses more institutional advertising where they show their fast- food restaurant as a place of comfort and family outings. Also, the situations they used in commercials aimed directly at ethnic consumers. For example, in recent commercial called "Big Day", the story comes with the African American matrimonial tradition that bride and groom jump over a broom. The situations they used in commercials aimed directly at ethnic consumers.

An advertising appeal of McDonald’s is convenience. Consumers want food and drinks that are convenient for them and they don’t have to make a stop for it. This is why McDonald’s has a drive-thru option. Another common executional style for advertising is “slice-of-life”. That is an advertisement that depicts people in their everyday life. Whenever you want something fast or on the go you will get McDonald’s. McDonald’s also has the option of having birthday parties for children and the play area. This is convenient because you do not have to rent something expensive and buy a lot of food. 

 McDonald’s also uses public relations. They have a charity called Ronald McDonald’s House Charities (RMNC) that helps save children all over the world. They also offer scholarships to students. "Local Chapters of Ronald McDonald House Charities(RMHC), with support from RMHC Global offer scholarships to students from communities who face limited access to educational career opportunities. These scholarships are part of RMHC's ongoing commitment to education."