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."

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”.