Know-How Exchange : Strategy

Sorry i had a look at your profile please accept my applogies.

Denise, you might want to look at another consumer-oriented business like Starbucks.

McDonald's is on the decline. Most of the current news you see about them is about their mistakes!

- Shelley

Historically, McDs has been very strong with the Product and Place part of he Marketing 4Ps.

Product - very uniform, you know exactly what you will get no matter what store you go in to.

Place - they focused on where they placed there stores, looking for the best locations. This got weaker in the last 10 or so years as they seemed to put too many stores in some areas, cannibalizing sales from their other stores.

The last 5-10 years, they have bit hit by health concerns and strong competitors. The last 2-5 years they have improved some through improving their menu and getting healthier. See https://money.cnn.com/2004/11/23/news/fortune500/mcdonalds_stock.reut/ for info on this last part.

I don't have a Marketing degree (I'm a telemarketing guy) but I've eaten at a lot of McDonalds...

You asked two questions:
- why has McDonalds had success?
- what are the tactics and strategies which drove that success?

I would like to focus on the first question. My perspective is that they have had success for many reasons: a culture of innovation, a strong belief in marketing metrics, and a long-term committment to advertising.

From my point of view, McDonalds has always seemed to be an innovator. The first time I got a drink with a top on it was at a McDonalds, it seems to me the first fast food place open for breakfast was McDonalds, and the first fast food place to have kid's parties was McDonalds, and the first fast food place offering toys was McDonalds...

... and the innovation continues. Today, McDonalds offers a grilled chicken salad - I do not know how you get healthier than that. They very much seem to have a culture which encourages innovation and creativity.

And, McDonalds has measured results. They test market everything, they measure the number of people who buy fries vs those who don't, and they make tactical decision based on these numbers. They have models for the most profitable mixes of product in a market, and if they aren't selling enough Big Macs - you'll be seeing ads for Big Macs.

Good luck in your new position !

In Australia McD's has had terrible press for the last two-three years - even before the Super Size Me movie.

I guess they've been copping flak for ten years plus from pediatric dietitians.

They've reacted with amazing speed for a MNC. New menus, Salads, Veggie burgers, low-fat beef burgers, low-fat hi-protein breakfast smoothies, and so on.

Sure they still have Big Macs and fried fries. But they're trying to reduce the fat load and provide reasonably-priced, wholesome alternatives.

Why have they succeeded? QSVC. Quality, Service, Value, Cleanliness. They've consistently known every possible statistic on their business, and their POS system provides data from every store in real time (!) back to head office. They know if fish burgers are bigger sellers on Friday outside Catholic schools, and when to put the extra staff on to cope with the post-football crowd near a stadium.

Analysis, Analysis, Analysis.

Test, test, test.

Load. Aim. Fire. Inspect. Adjust. Load... Aim...

I guess that's about it.

Hope this helps.

ChrisB

Just a little UK perspective on the issue.

I guess its important to note that McDonalds has changed the way it looks at its marketing from a organisational perspective over the last couple of years, and instead of generating global campaigns, its relied heavily on local and regional marketing units to better understand and deliver what that local market requirements are. This boost in local and grassroots marketing, and the tailoring of products, prices, outlets and menus to regional tastes, I believe has been its fundamental success.

In the UK the government has published a report on obesity and whilst a number of different factors were blames for this epidemic, it made it clear that the advertising industry MUST share a large percentage of the blame in the way it promotes 'unhealthy' foods. So you hardly get images of sportstars biting into huge, super-sized meals anymore, but the focus is on the 'community' side of McDonalds. From this report, we will see a shift is the way companies like McDonalds advertise their products:

o there will be a withdrawl from advertising to children on TV
o There will be no celebrity endorsement of 'junk' foods

There is also a shift away from US brands in general forcing US businesses to promote regional (non-US) images and messages.

A world study by GMI World Poll, shows that 20% of respondants outside the US say that they will avoid American branded products in reponse to the US position on foreign affairs (read Iraq war I guess into this statement, and the threat of further conflict!).

In the poll of 8,000 people around the world, half of them had an increasingly negative perception of the US!

So all in all, the marketing MUST change, and increasing move away from US advertising and marketing methods.

I hope this helps a little

Good Luck