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McDonald Marketing Communication Assignment
This report issolutionof marketing communication assignment. This iscriticalreviewonMcDonald's Marketing strategy andalsosuggestionaregiven.
Introduction - Market Sector
The takeaway and home-delivery market of The UK is valued at somewhere around £10.13bn in 2009. The average growth rate that has been observed in this market for last few years is around 4%. All the markets and industries have suffered due to the economic meltdown in the later stage of the last decade. But amazingly it seems that this hasn’t affected the take-away, fast food and home-delivery market much in UK. The major food chains have actually been able to open new shops and counters during the global economic recession. It has sustained the overall growth rate of the sector at a time when the sales growth of the other and competitive industries has been at a very slow rate. One of the most important reasons why this industry has been able to survive this downturn is its unique price proposition. Due to the low price offered by this kind of food joints they have been able to retain their customers and grow in these years. In spite of the global debt crisis, many of the fast-food chains have increased the number of outlets they have in the UK in 2010. Some of the companies who have expanded this way are Subway, Domino’s Pizza, EAT, Greggs, Subway and Costa.
The future estimated value of the UK fast-food, takeaway and home-delivery market will stay steady. But it may not show very high level of annual growth rate between 2010 and 2014. The attraction of fast-food and low prices and ongoing increases in the numbers of outlets operated by the major chains will help to sustain overall growth. (Euromonitor International (2010), Fast Food - United Kingdom)
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Though the core product offered in McDonald’s is hamburgers, but it has, with passing time added many new items to its menu. The products offered are:
- Burgers: Big Mac, Quarter Pounder, Hamburger and cheeseburger, McDouble etc.
- Chicken, Fish and Pork: McChicken, Premium chicken sandwiches, Snack Wrap, Chicken McNuggets, Filet-O-Fish, McRib etc.
- Other products: The Happy Meal, Deli Choices, Breakfast Beverages, Desserts.
Target Market and Positioning
Target segment: The target segment of McDonald generally comprises of teenagers, working professionals, college students. People, who generally are time bound, i.e. do not have much time in hand and are price sensitive are generally targeted by McDonald. Kids and young adults make the biggest chunk of McDonald eaters.
Segmentation: People who fall under McDonald’s segmentation are broadly everyone. Their biggest chunk of revenue and thus the profitability comes from the brand loyalists and the store patronages. These people generally have their lunch or dinner on these fast food joints due to various reasons. Time constraint or inabilities to cook are the two most important reasons amongst them. Hence it can be easily deduced that the teenagers and the college going students who stay on their own or in hostel are those who frequent these stores. Working professionals also visit these.
Positioning: McDonald's positioning is as the leader in the fast food industry. They position themselves as a restaurant where the food is good and affordable, the waiting time is very less and the people who take care of them are efficient and friendly. They project themselves as the place where the whole family can enjoy.
Political Environment: In UK there have been problems due to its symbolism of the American culture. The resistant British mentality was disturbed by the American free flowing culture and hence the problems.
Economic Factors: Recession proved to be a great factor for McDonald’s as more and more people frequented it for cheaper foods. This was a boon in disguise for the chain.
Social Factors: Switching cost to green and healthier alternative is high due to busy life and price of organic foods. Hence the profitability remains intact for McDonald’s.
Technological Factors: “Various technological developments including the EPOS link with suppliers and logistics planning software and reliance of cashless means of payment and measures to reduce fraud “(Haberberg & Rieple 2008, p.133).
Environmental Factors: McDonald faces some serious competition from Subway and other take away and fast food restaurants.
Legal Factors: Salaries paid to its workers and resisting its workers from forming and joining and a trade union caused some hiatus.
Review and Analysis of the Communications Mix
McDonalds has always been a brand friendly to the children. The management understood the fact that if they can make a brand loyal generation then it can always stay profitable in the long run. The children whom they impress with their products and other offerings will frequent the store even when they become adults and with them their children will also be loyal to the brand. Hence they created the brand proposition in such a way that it attracts the current generation children.
The most appealing proposition for the children was and still is the Happy Meals. These are assorted meals which come with small toys or other accessories. This particular proposition has always been backed by advertisements brilliantly. These advertisements not only appealed to children but also designed in such a way that they were more appealing to the British children. They incorporated nuances of everyday British life in those advertisements and connected with the British young and young adult generation very well.
Promotions and promotional tie-ins are the third proposition which McDonalds offered to the British mass market. From the very inception of the company they have relied heavily on this kind of marketing communication. They were also able to make a positive impression on the customers with different promotional offers. The promotional work of McDonald’s UK is done by Simon Marketing from the very inception of the brand in UK. They have traditionally tied up the brand with different big budget movies. Hunchback of Notre Dame, Hercules and Shrek are some examples of this. In their Happy Meals they have distributed small toys based on the characters of these famous movies. On 1996, McDonald signed exclusive rights with Disney, the world famous production house of animated movies. The deal was for 10 years which was extended later on. As a part of this deal, McDonalds have always displayed and distributed different toys and merchandises of the movies which are coming out of Disney house. The promotional activities of McDonalds are generally for competing with its peers, especially Burger King. As a reply to a new product launch of Burger King, to keep its market share intact, McDonalds started an offer which offered cheeseburger of three sizes at a very cheap price. (Lee J. 1995)
Other types of Business communication channels consist of the usual website and different hoarding and billboards of the company.
Recommendations & Communication Plan
Communication Objectives And Strategies
The key objectives of the new Integrated Marketing Communications campaign for McDonalds are as follows:
- Target the higher income group. As McDonald have traditionally catered to the needs of the people who generally tend to look for cheap alternatives of costly lunches or dinners, its time they targeted people with higher purchasing power. It will not only increase the size of the pie for them, but also open up a new segment for them which will create a blue ocean strategy for the famed chain. This will also ensure a blow to its competitors who generally target people with moderate purchasing capacity.
- To stop people from switching their loyalty towards other brands like Burger King.
Basic issue that advertising would address: Establishing an image of McDonalds as a quality food provider that can be a great substitute of the restaurants through its unique take-away format.
Advertising and communication objectives:
- To create consumer awareness about the vast choice of foods that would satisfy their individual needs.
- To create a sense of brand patronage amongst the existing customers.
Target audience:The target audience would be high-income people living in metropolitan cities aged 35 years and above and the existing band of customers.
The target audience is basically high-income people living in metro cities aged 35 years or above. For this purpose, all communication would be majorly focused on metropolitan and bigger cities of the UK.
The following media would be used for communication:
- Print media
A new tagline “WE’RE LOVIN’ IT” can be used for showing the brand dedication by the existing customers.
In terms of reach, television and print media would play a major role. Prime time television slots can be taken for airing commercials that would maximise visibility. Creative commercials would also reinforce the brand promise and maximize impact. Advertisements would be given in all local dailies and business magazines of all the bigger cities that would be helpful in reaching out to the consumers. Print media would also be used to create awareness about the products available in the chain. Paid articles in newspapers can be used as a tool for the purpose of generating goodwill among the UK customers.
Billboards will be used for maximising visibility and brand recall. All billboards and outdoor media vehicles would include the McDonald’s logo and tagline that would reinforce the brand image in the minds of the consumers.
Because high-income middle-aged people are being targeted; Internet will be an effective medium for consumer engagement and interaction. Most of the target audience would be educated and technology savvy. Tools like blogs, social networking sites, public discussion forums will be used that would help in responding to individual customers and getting instant feedback from them. Promotion of new services can be done instantly through this medium. Videos and pictures would also be uploaded on the website which would help in maximizing impact.
- Radio advertisements will be again helpful in strengthening brand equity by increasing brand recall and awareness. It will also be used to effectively communicate the Unique Selling Proposition (USP) of the brand. Not only that, it would also be effective to stream the testimonials from different brand loyal customers which would help the existing or the prospective customers to connect with the brand.
- Review the Web site against the marketing objectives, and making recommendations/changes would be carried out. digital marketing would be carried out to generate more hits to the website.
Sales Promotion and Event Sponsorship Recommendations
- It will be implemented to urge the first time customers more towards the store.
- For bulk purchase or repeat purchase incentives will be given in the form of coupons and premiums.
- The coupons would be sent by direct mails. This will help in creating a database of frequent customers.
- Event sponsorship can be a very good idea to create a mass publicity and that through in a controlled manner. Since the target customer segment which is chosen is males and females of 35+ years of age and high income group. So events which are target to these customers can be sponsored in order to create the publicity.
Guideline Budget based on Approximate Cost Estimates
|Television Prime Time||10000000|
|Outdoor Bill boards||90000000|
|IMC PROGRAMS BUDGET|
|TOTAL BUDGET PROPOSED|
Note: All the figures are in GB
- Mark Alfino, John S. Caputo, Robin Wynyard (1998), McDonaldization revisited: critical essays on consumer culture, Greenwood Publishing Group, Page 99-107
- Eric Schlosser (2001), Fast Food Nation: The Dark Side of the All-American Meal, Houghton Mifflin Harcourt
- James Thompson (2010), U.K. Girds for New U.S. Fast Food Invasion, Businessweek, June 7, 2010
- Adrian Haberberg & Alison Rieple (2008), Strategic Management: Theory And Application, Oxford University Press, Page 130-137