Mc donald marketing strategy analysis course marketing principles

Mcdonald'S Marketing Report
Marketing Principles (MKT101)

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MC' DONALD MARKETING STRATEGY ANALYSIS
Course: Marketing Principles

Student name (ID):
Vũ Thành Vinh (SS170704)
Nguyễn Trọng Nhân (SS170803)
Lưu Mỹ Tâm (SS170821)
Vũ Tuấn Anh (SE161608)
Đỗ Nguyễn Minh Thư (SS170781)
Lê Hoàng Vinh (SS170484)
Lecturer: Tran Ngoc Minh Nhu

Content
1. Introduction……………………………………….………………...……………...2
1.1 Background Of The Company……………………………………………..2
2. Mc Donald’s Marketing Strategy………………………………………………..2
2.1 Mcdonald Swot Analysis…………………………………………………...2
2.1.1 Strengths of McDonald's…………………………………………..2
2.2.2 Weaknesses of McDonald's……………………………………....3
2.1.3 Opportunities For McDonald's…………………………………….4
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2.1.4 Threats For McDonald's…………………………………………...5
2.2 Overview……………………………………………………………………..6
2.3 Mc Donald's Marketing Mix In VietNam Market From (2014 to 2015)...7
2.3.1 Product and Service…………………………………………………..7
2.3.1.1. Product……………………………………………………......7
2.3.1.2. Service………………………………………………………...8
2.3.2. Price……………………………………………………………………8
2.3.3. Place…………………………………………………………………...9
2.3.4. Promotion……………………………………………………………...9
2.3.4.1. Advertising…………………………………………………….9
2.3.4.2. Personal selling……………………………………………....9
2.3.4.3. Sales promotion……………………………………………..10
2.3.4.4. Public relations (PR).........................................................10
2.3.4.5. Direct marketing……………………………………………..10
2.3.5 People………………………………………………………………….10
2.4. Mcdonald’s Marketing Mix In Viet Nam Market Currently………..……....10
2.4.1. Product strategy……………………………………………………...11
2.4.2. Price strategy…………………………………………………………11
2.4.3 Distribution strategy…………………………………………………..12
2.4.4. Promoting strategy…………………………………………………...13
3. Advice for Mc Donald's marketing strategy……………………………………..13
3.1 Price:.........................................................................................................14
3.2 Distribution:...............................................................................................14
4. Conclusion.........................................................................................................15
5. Reference……………………………………………………………………………...15
1. Introduction

1.1 The Reason for this report
The primary purpose of this report is to research the marketing strategy of
Mcdonald’s not only in the past but also at current. Our team focus on both the
SWOT and 4Ps Marketing Mix of McDonald’s. Moreover, our team also gives some
practical advice to improve the marketing strategy of Mcdonald’s in the VietNam
market
1.2 Background Of The Company
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McDonald's is the world's largest fast-food restaurant company, with over 36,000
locations serving 68 million people daily in 119 countries. A McDonald's restaurant is
run by a franchisee, an associate, or the firm itself and was founded in the United
States in 1940. With 1.9 million employees, 1.5 million of whom work for franchises,
it is the second-largest private employer. It has expanded its menu to include salads,
fish, wraps, smoothies, fruit, and seasoned fries.
2. Mc Donald’s Marketing Strategy
2.1 Mcdonald Swot Analysis
2.1.1 Strengths of McDonald's
The company's strength is its targeted market penetration strategy and product
development breadth. That is the most critical factor in its success and positioning as
a market leader in this area. The following strengths are identified in McDonald's
Delicious meals
McDonald's French fries are the best-tasting in the fast-food sector. McDonald's
works with domestic and foreign vendors to ensure consistent, high-quality products.
Because the company's worldwide franchise network is rigorously supervised, a Big

Mac purchased in Pittsburgh will taste exactly like one purchased in Tokyo. This
choice has a considerable advantage for tourists who are apprehensive about eating
local cuisine in a new location.
Technology developments
McDonald's uses digital initiatives to accomplish its vision of the "Experience of the
Future." McDonald's' notion of a "future restaurant" is based on technologies such as
kiosks, mobile order and payment systems, and self-service.
Large market share
McDonald's is frequently recognized as the market leader in scale and global reach.
McDonald's continued to thrive in 2006, but Wendy's and Burger King are losing
market share. McDonald's recently owned a market share of around 19 percent,
Yum! Brands 9 percent, Wendy's and Burger King each 2 percent. With a brand
value of $126.04 billion in 2018, McDonald's is the most valuable fast-food brand
globally. Starbucks, the second most valuable brand, was only worth $44.5 billion.
Therefore no other fast-food chain came close to matching McDonald's value.
Effective marketing strategies

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Ronald McDonald's famous face has become synonymous with McDonald's
worldwide. This leads to exceptional marketing techniques among management,
including extensive market research and a high percentage of success.
2.2.2 Weaknesses of McDonald's

McDonald's downfall is due to internal strategy concerns and market competition.

They are manageable if the company takes a strategic approach to them.
Weaknesses identified by McDonald's SWOT Analysis include:
Unhealthy food image
Unfavourable press, such as Morgan Spurlock's documentary "Supersize Me," which
blames McDonald's and other fast-food firms for our society's obesity, has harmed
the fast-food behemoth. McDonald's foods are high in calories. However, they are
nutritionally deficient.
Franchise business model
McDonald's has established the international franchising standard. This complicated
network of franchisees and company-run businesses comes with significant hazards.
The company is experiencing financial difficulties, inadequate management,
dissatisfied consumers, and a lack of revenue-generating. Franchisees, who operate
autonomously and have little impact on their daily performance but directly impact
the brand, create the majority of the corporation's revenue.
Supply chain disruptions
McDonald's, one of the busiest food franchises, McDonald's is subject to supply
chain interruptions regularly. It also decreases the availability of critical operational
products. As a result, operating expenditures rise when a franchisee experiences
such disruptions, resulting in lower revenue and profitability.
Customers lose due to intense competition.
Wendy's, Burger King, and Yum! Brands are among the many prominent fast-food
brands that McDonald's is pitted against. As a result of the fierce rivalry, McDonald's
loses many customers to other companies.
Employee Dissatisfaction
Employee unhappiness has been high in many companies due to recent employee
rights revolutions worldwide and rising wage limits. Employees at McDonald's have
recently expressed their dissatisfaction with the company. Workers held many rallies

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and strikes in favour of their demand for a $15 minimum wage, putting the
company's image in jeopardy.
2.1.3 Opportunities For McDonald's
McDonald's has numerous market opportunities that it may take advantage of to
attain long-term viability. McDonald's offers the following options.
Innovative Products
McDonald's needs to develop new menu items to entice customers away from new
fast-food joints. In 2018, the firm debuted MIX by Sprite Tropic Berry, an exclusive
beverage available only in its New York stores. It was a great hit, and there are plans
to serve it across the United States. By adding more goods of this type based on
local conditions and culture, McDonald's can maintain their attraction for a more
extended period.
Rebuilding Brand Image
Even as fast-food restaurants battle the perception of being junk-generation
hotspots, it may be prudent for McDonald's to take strong moves toward healthier
and more customised offerings. These advancements have resulted in an increase in
comparable sales, which has enhanced profitability. Even though franchising is
lowering sales, McDonald's healthy image can continue to make a difference in the
long run.
Increasing demand for healthy products
McDonald's is concerned about the impact on its customers' health, but it also sees
this as an opportunity. This company can generate new items, such as fresh burgers
or healthy desserts.
Global Expansion
McDonald's may be the monarch in the United States, but it has difficulty competing

in other countries. However, if the firm concentrates on developing into foreign
markets rather than domestic markets, it is more likely to continue expanding
globally.
2.1.4 Threats For McDonald's
Threats prohibit a company from fully exploiting its existing resources, depriving it of
the potential benefits. As a result, McDonald's faces only a few dangers.
Risky investments in technology McDonald's new efforts have a bright future, but
investing in technology is risky. High-intensity competitors

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As the fast-food industry has grown, many new fast-food brands have entered the
market. McDonald's does not suffer from a lack of robust competition. Some
corporations, such as Yum! Brands Wendy's, and Burger King, are steadily gaining
power. Even though they have a smaller market share, some brands actively seek
out McDonald's customers.
Operational Threat due to Cultural Differences
Cultural barriers have tainted McDonald's reputation that the company has met as a
global fast-food chain in various world regions. The franchise's location adds to the
difficulty of adapting to diverse operating requirements. The epidemic of public
health
Despite the growth in obesity among Americans, fast food establishments such as
McDonald's will continue to be overshadowed by historical product offers such as the
Supersized Meal, Economic recession
Depending on how long this "crisis" lasts, the trickle down effect will negatively

influence the company's revenue streams, despite its various revenue streams.
Consumer spending and visitor traffic may drop during economic downturns as
household finances tighten, reducing retailer sales.
2.2 Overview of Mc Donald’s Marketing Strategy
McDonald's Corporation operates and franchises McDonald's restaurants worldwide.
McDonald's primarily sells hamburgers, cheeseburgers, chicken products, french
fries, breakfast items, soft drinks, and desserts. McDonald's has offered the following
strategy directives to promote Marketing via its goods.
The first is through children's advertising with familiar imagery such as
McDonaldland - a mythical fantasy realm inhabited by Ronald McDonald and his
companions and a McDonald's media franchise. Initial attempts to expand the
McDonaldland universe by Needham, Harper & Steers were reportedly retconned
due to legal issues. Still, ongoing aspects were developed in McDonald's projects in
collaboration with Virgin Interactive, Treasure, and SEGA, starting with the creation
of Ronald McDonald in 1963.
Celebrity endorsements are the second marketing way that Mc Donald use to
advertise their brand:
Michael Jordan, a basketball star, was the first celebrity to have a McDonald's value
meal named after him in 1992. The "McJordan," a Quarter Pounder with pickles, raw
onion pieces, bacon, and barbecue sauce, was available at Chicago franchisees.
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Sprite released a unique "Sprite 6 Mix by LeBron James" flavour in March 2014.
McDonald's will debut the "Travis Scott Meal" in September 2020, which includes a
Quarter Pounder with cheese, bacon, lettuce, pickles, ketchup, mustard, medium

fries with barbecue sauce, and a Sprite, quality. Scott created new McDonald's
outfits and Cactus Jack items based on old fast-food chain images. In collaboration
with musician J Balvin, the Corporation released the "J Balvin Meal," which included
a Big Mac without pickles, ketchup fries, and an Oreo McFlurry.
McDonald's has teamed with Korean boy band BTS to launch the "BTS Meal" in 50
countries worldwide in 2021, with select countries launching on May 26.
2.3 Mc Donald's Marketing Mix In VietNam Market From (2014 to 2015)
2.3.1 Product and Service
2.3.1.1. Product
Product Mcdonald's proposes employing the differentiation principle to strengthen
their position in Vietnam. They produced new vegetarian menus for the Vietnamese
based on product differentiation, as the Vietnamese prefer vegetables and rice.
Because competitors KFC and Burger King do not supply a vegetarian food menu for
the Vietnamese (THE WEEK STAFF, 2015). McCurry Pan is the name of the
vegetarian menu. Vietnam is nearly synonymous with the Big Mac, and this is the
first McDonald's franchise to change its main product, with the following McDonald's
has already given the first meat-free in South Asia country sales in Amritsar, and
McDonald's has replaced the original beef and bun Big Mac with a healthier fish and
tofu patty on a deliciously spicy fried rice. The Big Mac kept original toppings such as
lettuce, cheddar, cheese, garlic, pickles, mayonnaise, ketchup, and Big Mac sauce to
maintain McDonald's product authenticity.
2.3.1.2. Service
- McDonald's restaurants will be serving the first fast food open 24/7 to bring
delicious family meals in a space comfortable and safe at any time of the day. FREE WIFI, supply extremely fast, consistent, and maximum performance in every
capacity.
2.3.2. Price
The price charged is heavily influenced by the customer's perception of value.. A
McDonald's Big Mac will cost 85,000 Vietnam dong ($ $3.99) in Vietnam. This is less
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expensive than a Big Mac ($4.62) in the United States. Compared to other fast-food
brands with a presence in Vietnam, such as Popeye's, KFC, Lotteria, Burger King,
the price of McDonald's Vietnam is considered reasonable. This will increase
competitiveness in the Vietnamese fast-food business.
2.3.3. Place
McDonald's Da Kao is a loan store in Ho Chi Minh City, Vietnam. It was divided into
three sections: Grab & Go, LingerZone, and Flexible Zone.
2.3.4. Promotion
McDonald's uses promotional activities to communicate with its target customers
effectively.

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Mcdonald's

promotion

technique.

The

Communication mentioned above Mix explains the affordable cost to consumers.
Some of Mcdonald's most well-known marketing campaigns include: "You deserve a
break today, so get up and get away -" Food, Folks, and Fun," "I am loving
it ."Mcdonald's corporate uses advertising, personal selling, sales promotion, public
relations, and direct marketing to establish itself as the world's leading Burger
Empire. Vietnam's marketing strategy The message is conveyed in global brand
positioning: McDonald's advertises the approach "McDonald's - Global Brand has
arrived in Vietnam" or "McDonald's - Global Brand is on its way to Vietnam."
customers.
2.3.4.1. Advertising
McDonald's also holds the handoff advertising due to different advertisement
elements. The three primary goals of McDonald's advertising are to make consumers
aware of an item, feel good about it, and remember it. The right message must be
delivered to the right individuals via the appropriate media (Dean, 2021). McDonald's
advertises on television, on billboards, and at bus stops. They advertise in print and
television, an important marketing tool.
2.3.4.2. Personal selling
Selling to individuals When it comes to personal selling, Employees from Mcdonald's
operating in various outlets are the ideal example of personal interaction because
they are directly serving customers, and face-to-face conversation is easy to do.
Individual selling staff is assigned to the McDonald's store, and they are the ones
who undertake the duties related to selling goods to consumers.
2.3.4.3. Sales promotion
Promotion of sales McDonald's holds multiple sales promotion contests and
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programs in various retail markets and locations, where free discount coupons are
distributed. The Mascot McDonalds statue, one of McDonald's trademarks, is always
there for any occasion.
2.3.4.4. Public relations (PR)
Public relations (P.R.) is another crucial component of McDonald's marketing
strategy. Employees at restaurants play an essential role in interacting with the
general population. Employees dedicate themselves to consumers and the
customer's thoughts about the company daily. McDonald's believes that before
engaging with customers, they must be aware of what their competitors are saying
so that they may differentiate themselves from their competition.
2.3.4.5. Direct marketing
One of the most effective promotional strategies is direct marketing; McDonald's
uses the feature in their home delivery services, where they deliver the order directly
to the customer's home (Dean, 2021). They also have websites that are more suited
to direct marketing in that they usually list all of the new deals and the phone
numbers of neighbouring locations.
2.3.5 People
People are the final component of McDonald's Marketing Mix. This is not a typical
Marketing Mix. When discussing the People element, the primary goal is to examine
both customers and employees because unhappy employees are more likely to vent
their frustrations on customers. This would lead to poor service, and negative P.R.
McDonald's management determines what consumers and staff want and ensures
that they are entirely happy. People in Vietnam are also professional and friendly.
McDonald's has always provided opportunities for employees to advance their
careers while working for the firm.
2.4. Mcdonald’s Marketing Mix In Viet Nam Market Currently
2.4.1. Product strategy
Bringing up the necessity of creating a menu, Mr. Nguyễn Huy Thịnh - the Manager
Director of McDonald Vietnam, insisted that: "To gain a foothold in the market, food

brands need to understand customers' needs clearly, especially about food culture.
There needs to be a balance between bringing unique products of the brand,
improving and offering suitable products for Vietnamese tastes". With McDonald's
Vietnam, in addition to introducing products that are well-known like Big Mac
Hamburger, French fries, boneless chicken McNuggets, the brand also serves items
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that have appeared on menus in other countries such as egg muffins, egg sausage
muffins, hotcakes, potato cakes, and fried hash brown. Most recently, the company
launched a traditional fried chicken dish and is considered by the culinary community
as one of the best fried chicken dishes to try.
2.4.2. Price strategy
When launching in Vietnam in 2014, the name McDonald's promised to greatly
ìnfluence the fast food service market. Many groups of people waited in line to buy
food. More than 400,000 diners shared information about McDonald's in the first
month of opening. People predicted a bright future for McDonald's in this country.
However, McDonald's made the first mistake when using the high price strategy in
the Vietnamese market: McDonald's applied the "West" price to the "East" market.
McDonald's has a few local variations, such as chicken rice and broken rice, but not
all Vietnamese diners can afford to become regular customers at McDonald's stores.
So why did McDonald's choose it? For the Vietnamese market at such a price?
Firstly, McDonald's is a famous name worldwide and is the first fast-food restaurant
in Vietnam to build a drive-through system for motorbikes and cars.
Secondly, the Big Mac in Vietnam uses most of the imported ingredients from
Australian beef white fish fillets caught in the Atlantic and Pacific seas. A baker in

Malaysia also provides potatoes from the U.S. Bread. Only green vegetables and
tomatoes are from farms in Dalat. While in many other countries, they can find
quality domestic suppliers, so their localization rate is higher than in Vietnam.
2.4.3 Distribution strategy
In the initial step of entering the Vietnamese market, McDonald's has all three stores
evenly distributed throughout Ho Chi Minh City. We chose Ho Chi Minh City as a
starting place because this is a target market with high-income customers, so
McDonald's can execute its high price strategy appropriately. Moreover, this is a
vibrant market with a high population density, a reasonably modern lifestyle, and a
tendency to prefer novel products. Entering the Vietnamese market as a giant in the
fast-food market, McDonald's chooses an entirely different business model from the
existing brands in the market. Two of the first three McDonald's stores are located
outside the city center.
McDonald's wisely separated from the crowd when they did not choose stores
concentrated in the downtown area. This is quite a bold move but feasible for
McDonald's when the market in the city is already tight, with hundreds of other fast10

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food brands available on every corner. McDonald's chooses the location of its stores
on the strategic road leading to the city when traveling from the North and the
Central region in District 1 and the street in District 6, which enters the town from the
West direction. This will enable car travelers in different areas to enjoy the product
through the unique "Drive-thru" service. Besides, the reason for these two positions
may be the requirement of large premises with campuses in stores (which is difficult
to do in a central location), or maybe McDonald's goal is to catch up the number of
people moving in and out of the center when going to work and at leisure time.

3. Advice for Mc Donald's marketing strategy:
Currently, McDonald's is no longer a strange name for Vietnamese people
worldwide. It is known as the "tycoon" of the fast-food industry. More and more,
McDonald's is gradually asserting and consolidating its number one position, leading
in the fast-food business in the world for many years. Having penetrated the
Vietnamese market for more than six years, McDonald's continuously reported
losses. Compared to its success worldwide, the announcement made everyone feel
astonished. Though a famous brand globally, McDonald's is not prominent in
Vietnam and still faces many obstacles and great difficulties. In addition, the fastfood market in Vietnam is increasingly competitive and fiercer with many other
competitors such as KFC, Lotteria, Wendy's, Burger King... To succeed in Vietnam,
McDonald's also has to overcome another tough competitor in changing consumer
behaviour: bread carts and street stalls that are too familiar with Vietnamese culture.
After studying the marketing mix strategy of McDonald's, we would like to propose
some solutions to help this brand develop further in the Vietnamese fast food market:
3.1 Price:
Vietnam is a developing country with a relatively low per capita income, but the price
of McDonald's products here is relatively high compared to the common ground.
With this price, only urban people with high incomes can afford it. As for manual
workers, low-income young people living in ordinary families cannot regularly pay for
a meal of 40,000-80,000 VND for a quick dinner. It is possible to have products with
affordable prices if the input materials in Vietnam are taken advantage of. Vietnam is
an agricultural country with various vegetables, tubers, fruits, livestock, and poultry.
McDonald's can take advantage of pork, beef, chicken, lettuce, cherry tomatoes.
Here to make products in its store chain, not only to save cost but also to meet
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consumers' taste in Vietnam. Most of the ingredients used to make McDonald's Big
Macs are imported, including Australian beef, white fish fillet caught in the Atlantic
and Pacific oceans, and potatoes from the United States; this forces McDonald's to
spend a significant amount of capital on input materials, and the products will not be
fresh because they are frozen and transported back to Vietnam over long distances.
If McDonald's can use available Vietnamese ingredients for its products, it can
reduce the cost of dishes.
3.2 Distribution:
McDonald's stores in Vietnam are primarily located outside the city center. The
strategy of this business is to separate the crowd to get its market. However, this
strategy is not suitable because the number of customers targeted here is very
narrow. If McDonald's wants to expand its market share further in Vietnam and earn
the desired profit, it needs to have other strategies to compete directly with
competitors in the industry, gaining prominence in the city centers. Expand the
market into the city center areas. However, if large-scale opening stores are pretty
risky, Mc Donald's may consider creating smaller stores to save space, construction,
and infrastructure investment costs. Open more McDonald's stores in large
commercial centres. Trade centres are places with a very crowded number of
consumers, even on weekdays and holidays. Shopping, stress relief, hanging out
with friends and family. Coming to a shopping mall, customers tend to go to fast-food
restaurants to eat after a shopping or movie session, for example, eating chicken.
Fried rice, hamburgers... If Mcdonald's is put in big commercial centres, many
customers can get attention and visit to enjoy the food here.

4. Conclusion
In conclusion, Mc Donald's has been very flexible in applying suitable strategies in
Vietnam and other countries. From pricing strategy, marketing strategy, promoting
advertising approach, Mc Donald's knows how to increase its advantages in
Vietnam. They have been creating new menus to attract more people, setting up

suitable locations, using more coupons and other promotions. According to the latest
marketing strategy, McDonald's focuses more on advertising because it can create
higher incomes and reach more consumers. Its techniques have been developed

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and executed successfully to adapt to the needs of the consumers, not only to raise
its fame but also to profit more compared to the other brands such as KFC, Lotteria,
etc.
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