MKT304A McDonalds Analysis Assignment Sample

Subject Code : MKT304A
University : Flinders University My Assignment Services is not sponsored or endorsed by this college or university.
Subject Name : Management

Brand and Product Management

How does the brand excel at delivering the benefits customers truly desire?

McDonalds as a brand survives essentially by offering the customers products that are made especially keeping them in mind. Being spread across 118 countries and having over 34,000 different outlets (McDonalds, 2020), it is necessary for McDonald's to adjust according to the different requirements posed by different countries. The customers at McDonald's are looking for something affordable, something delicious, and something that will be ready swiftly. Each and every McDonald's outlet strives to fulfill all these particular requirements. The food at McDonald's is affordable, tasty, and is ready within minutes. While fulfilling these requirements, it is also made sure that the food is fresh and top quality is maintained while delivering every food item (McDonalds, 2020).

Along with these requirements, McDonald's also makes sure that every outlet in a particular country is catering to the demands of that country. For example, McDonalds India has a largely vegetarian menu due to the beliefs they have against eating beef. Their food items also contain spices and Indian seasonings (Kaur, 2020). Similarly, Norwegian McDonald's offers not only traditional Norwegian cheese 'Brunost' along with its sandwiches but also has vegan burgers due to the customer demand (Kaur, 2020). McDonald’s, while maintaining the level of efficiency and quality amongst all its outlets, has adapted to the requirements of every country and keeps introducing new food items based on the popular demands of the customers.

How does the brand stay relevant?

It is essential for a brand to stay relevant at all times. This is especially important for a brand like McDonald’s whose service is availed by the customers on a daily basis. A brand cannot let itself get too old or be forgotten and thus applies various strategies to avoid the same. Apart from maintaining a high standard of quality and service, McDonalds also strives to understand its customers and their requirements better every single day along with upholding the McDonald's brand name and making and maintaining loyal relations with its customers (McDonalds, 2020).

McDonald's has been able to maintain consistency and innovation over the years (Bailey, 2020). The brand realizes the importance of consistency to a franchise system and thus has worked hard to establish the same. This way, customers know what to expect and can always rely on the brand to get exactly what they need (Bailey, 2020). After establishing a solid foundation, the brand started innovating to meet the requirements of its customers in a better way. Via innovation, McDonald’s is able to experiment with different aspects and assess what is attracting more crowds and sitting well with the audience of a particular location. One example of this is McDonald’s India introducing rice bowls and “dosas” in their menu to accommodate a bigger audience. These are trial and error methods but McDonald’s is at the liberty to experiment due to the presence of a loyal customer group.

How is the pricing strategy based on the consumers’ perception of value?

It is a common principle in marketing that a customer will pay the price for a brand as long as it is worth the money. What a product or service essentially has to do is be worth that money. This is also applicable in the case of McDonald's where the founders have found a perfect blend of affordable and tasty, along with swift and efficient service. It is not one but all of them that make McDonald's worth every penny.

According to Smith (2016), the prices at McDonald’s have been kept low by firstly, hiring, and training inexperienced employees instead of trained cooks and secondly, hiring only a few trained managers. At McDonald's, the founders have also made use of the techniques of price bundling and psychological pricing (Smith, 2016). Using the concept of price bundling, McDonald's offers meals and other products bundled together at a discounted price to attract customers to those products. Along with that, McDonald's uses the pricing that appears to be more affordable psychologically, like pricing an item at _.99 Dollars instead of rounding off to a whole number. Along with that, McDonald's have priced their products depending on the location and the local pricing in that area (Smith, 2016). What this essentially means is that McDonald's fixes its prices keeping in mind the local prices in that area along with considering the psychology of the human mind and deciding the prices accordingly and making them affordable.

Is the brand positioned properly?

The positioning of a product is essentially highlighting what makes the product different from other similar products in the market. It is important for a brand to be recognized by the audiences and be positioned in such a way that it occupies the top niche in a consumer's mind (Keller, 2015). This is also where the "branding" comes into play. The marketing of a product or company should be done in a way to make people aware of the brand and at the same time attract them towards the company. Most companies make use of advertising in order to position their company or a specific product.

In the initial years, McDonald’s positioning strategy was solely “quick service of hamburgers” as it was the one thing McDonald's strived to do. This service gained quick popularity and a large audience slowly who started recognizing McDonald's as "low prices, good quality, and fast delivery" which became their main position in the market (Mohammed, 2019). However, over the years many other competitive fast-food joints and other innovations have come into existence. Over these years, McDonald's existence has molded itself into that of a family-friendly low-cost fast-food business. The addition of various breakfast menus and the introduction of McCafe has also added to the position of the brand. The founders have put their focus on cutting delivery time and making the services offered to the customers faster and more effective. Along with that, McDonald's focuses on advertising to specific target audiences in order to build and uphold its position in the market.

Is the brand consistent with their marketing program?

Maintaining a strong brand means finding the right equilibrium between innovation and consistency (Keller, 2015). If a brand keeps changing the message it sends to the audience or the product size, shape, style, etc. it messes with the brand image and can possibly drive the customers away. An average consumer looks at about 5000 ads in a day (Atamanuik, 2020) and it can be increasingly confusing for a consumer if the massage a company gives in its advertisement keeps on shifting its focus. Thus, it is important for a brand to maintain consistency within its advertisements and ad campaigns.

McDonald’s as a brand has consistently executed successful marketing campaigns (Chamat, 2017). McDonald’s has taken steps to understand the customers carefully and reflects this in their advertisements as well. One example of this is the advertising for McCafe that showed people from all walks of life taking some time off and enjoying a cup of coffee. This not only attracts individuals from all walks of life but also appeals to a bigger audience. Along with that, McDonald's offers a consistent experience irrespective of which part of the world. The advertisement layouts, advertisement messages, and the overall experience McDonald's offers are consistent throughout the world (Chamat, 2017). Anywhere you go the wrapping of the burgers, the Coca-Cola cups, and the fries container is consistent throughout. The advertisements McDonald's makes are also smart, innovative, clear, and unique which is also visible in every single advertisement.

Does the brand portfolio and hierarchy make sense?

McDonalds is the umbrella that holds under itself three different brands: McDonald's, McCafe, and Ronald McDonald (McDonalds, 2020). However, unlike other companies that have different brands in different market segments, all three sections of the McDonald's company work together in unity to give a customer the entire "McDonald's" experience. The McDonald's food outlet and McCafe are usually present together and complement each other in the items they offer. Most companies have minimal overlap in between their different segments but that is not the case with McDonald's. McDonald's has an almost complete overlap between its segments. To be fair, this brand portfolio does make sense compared to the other alternatives. It makes sense that the food joint and beverage joint of McDonald's is present together so that people can avail whichever service they need. On the other hand, if McDonald's and McCafe were independent and did not overlap, in all probability they would not be as successful.

The McDonald's hierarchy is also very simple and stable with each franchise having multiple employees (crew members), one manager, and about two assistant managers. There exist location-wise general managers who held all the franchises in a specific area. Apart from that, the company has a sales team, marketing team, finance team, and top-level executives (Hierarchy Structure, 2018). The hierarchy of McDonald's is relatively simple in order to facilitate cost-cutting and effective communication.

Does the brand make use and co-ordinates a full repertoire of marketing activities to build brand equity?

Once a brand is already established, a company tries to stay in touch with the customers and stay relevant by applying various methods of reinforcing brand awareness and competing with the rivals in order to maintain the lead (Keller, 2015). Many steps can be taken to remind the audience of the brand: associate the brand with a person, place, refine the image or show the customers how and why a product is used (Keller, 2015). Companies use any and all types of marketing strategies and experimentation to catch the attention of the audience.

McDonald's as a brand is well known for its marketing strategies and the various methods employed to catch and retain the attention of the customers. McDonald's has come up with various clever marketing campaigns over the years to widen the engagement of the brand. An example of this is the Facebook live event done by McDonald's in honor of "Nation Hamburger's day" which saw a comedian paint a trio of burger-inspired portraits (Econsultancy, 2019). Another example of this is the “Ask McDonald’s” campaign where the customers were given a tour of the quality and traceability of their food items and answered over 20,000 questions asked by various customers. McDonald’s is always on the search for innovative ways to engage with the audience and improve brand awareness. They keep experimenting with different marketing segments in order to keep the brand alive.

Do you believe the brand understands what it means to the consumers, e.g “Who am I”?

Once a product or service is out in the market, it doesn’t matter how the company wants the audience to perceive the brand. What matters is HOW actually the audience perceives the brand. Different customers affiliate different emotions, beliefs, attitudes, and understandings with a particular brand and it is important for the brand to understand these perceptions deeply. Once the brand understands what it means to the consumers it becomes relatively easy to understand what customers like and don't like about a particular brand.

Though McDonald’s still remains a deeply loved brand, it is believed that it is losing its touch in the changing markets of certain countries. With the growing competition and variety, McDonald’s is losing parts of their customers to other brands who are fulfilling their desires better. According to reports, McDonald’s sales and earnings per share have reduced in the last few years (Page, 2020). And yet, in spite of this, it is known that McDonald's does indeed understand its customers. For customers, McDonald's is a family-friendly place that has low prices, tasty burgers, and efficient customer service (Page, 2020). The brand still hasn't changed any one of these aspects and still remains loyal to its core customers. When a brand knows what customers want from it, it's the duty of the brand to keep the customers happy.

Do you believe the company who owns the brand or the brand itself offers proper ongoing marketing programs to support the brand?

It is important for a brand to support itself in the long run. The brand equity has to be in such a way that the customers have proper awareness about and a proper association with the brand. It is highly desirable for a brand to gain the status of a high-value brand or gain acceptance from a large audience.

According to Forbes magazine, McDonalds is the world’s 9^th most valuable brand (Forbes, 2020). What this essentially means is that McDonald's is largely valued by the customers and its services are heavily availed. The yellow and red color combination used by McDonald's along with the golden arches, the "I'm lovin' it" tagline and the presence of a highly famous mascot, all have added to the value of McDonald's brand. The McDonald's logo is simple, catchy, and memorable which makes the brand easy to remember. The brand has put in constant resources and efforts in advertising as well as services in order to become a brand that is recognized worldwide. The brand still continues to expand globally and attract new customers every single day. In spite of having a stable presence in the market, McDonald's is constantly coming up with innovative ideas to let the customers know something more about the brand and engage more with it. The brand does have consistent ongoing marketing programs that support the brand and help it re-establish its presence.

In your opinion do you see evidence that the brand monitors its sources of brand equity?

It is essential to establish a stable brand presence and social value in society. However, it is also important to take these steps with moderation and keep an eye on the resources that are spent on building brand equity. Along with that, looking out for the sources of brand equity, i.e., brand awareness, brand loyalty, and brand image is also important. Keeping a track of all these aspects can help a brand track its progress in a systematic manner and gain insights into how the brand is perceived by the audience.

In my opinion, McDonald’s does take measures to ensure that a watch is kept on the brand awareness and brand image. Brand loyalty, especially, is very important to McDonald’s and the brand has maintained its standard of cost-effective and tasty food items for the sake of its loyal customers. Along with that, in order to maintain the brand image and brand awareness, McDonald’s is consistently seen coming up with effective ad campaigns and raising concerns for social issues and contributing in the same. McDonald’s is constantly seen upholding and maintaining a particular standard when providing advertisements or services to a group of customers. McDonald’s has also increased its engagement with the customers in the last few years on demand from the customers.

References for Brand and Product Management

Atamanuik, M. (2020). How many ads do you actually see daily?! Retrieved from https://clario.co/blog/live-secured/ads-seen-daily/#:%7E:text=are%20right%2C%20the%20average%20modern,around%205%2C000%20ads%20per%20day.

Bailey, R. (2020). How has McDonald’s been so successful for so long? Retrieved from https://www.franchisedirect.com/information/markettrendsfactsaboutfranchising/thesuccessofmcdonalds/8/1111/

Chamat, R. (2017). About successful marketing. Retrieved from https://www.8ways.ch/en/digital-news/4-lessons-mcdonalds-can-teach-us-about-successful-marketing-1

Econsultancy. (2019). 10 brilliant digital marketing campaigns from McDonald’s. Retrieved from https://econsultancy.com/10-brilliant-digital-marketing-campaigns-from-mcdonald-s/

Hierarchy Stucture. (2018). McDonald’s company hierarchy. Retrieved from https://www.hierarchystructure.com/mcdonalds-company-hierarchy/

Kaur, H. (2020). What McDonald’s is like around the world. Retrieved from https://spoonuniversity.com/lifestyle/what-mcdonalds-is-like-around-the-world

Keller, K. L. (2015). The brand report card. Retrieved from https://hbr.org/2000/01/the-brand-report-card

Kelly, J. (2020). McDonald’s (MCD). Retrieved from https://www.forbes.com/companies/mcdonalds/#2b9ce2c01ac7

McDonalds. (2020). FAQS | McDonald’s UK. Retrieved from https://www.mcdonalds.com/gb/en-gb/help/faq/18525-what-countries-does-mcdonalds-operate-in.html

Mohammed, S. (2019). Brand positioning strategy -McDonald’s, an example - Shah Mohammed. Retrieved from https://medium.com/@shahmm/brand-positioning-strategy-mcdonalds-an-example-6102932e21#:%7E:text=The%20Positioning%20%2DSo%2C%20initially%2C,Quality%20Hamburger%20with%20Quicker%20Delivery’.

Smith, A. (2020). McDonald’s ‘think global, act local’ pricing approach. Retrieved from https://mpk732t12016clusterb.wordpress.com/2016/05/02/mcdonalds-think-global-act-local-pricing-approach/#:%7E:text=McDonald’s%20pricing%20strategy%20also%20involves,more%20affordable%2C%20such%20as%20%24__.

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