In 1940, Dick and Mac open McDonalds Bar-B-Q restaurant on Fourteenth E streets in San Bernardino, California. It is a typical drive-in featuring a large menu and car hop service. But in 1948 they shut down their restaurant three month for alterations.
In December, they reopen as a self-service drive-in restaurant. They have nine items inside their menu that are: hamburger, cheeseburger, soft drink, milk, coffee, potato chips and a slice of pie. After one year, they use French Fries to replace the potato chips. In 1954, a 52 years old salesman call Ray Kroc visit McDonald in San Bernardino intending to sell the brothers more Multimixers. A great success story was in the making. In 1955, Ray Kroc founded the McDonald’s Corporation and opened the first restaurant in Des Plaines, Illinois.
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In 1961, he bought out the McDonald’s brothers. Ronald McDonald’s appears in his first national television commercial in 1966. He appeared his “flying hamburger” in one minutes colour spots on the NBC and CBS network. 1968 Jim Delligatti of Pittsburgh add a Big Mac to the national menu. Along the way they added many other items into the menu including breakfast set meal, and also Happy Meals that comes with toys included.
Ray Kroc, Founder and Senior Chairman of the Board of McDonald’s, dies on January 14 in 1984. After three years, have a new menu is added in to the national menu on May 15, that is Fresh Salads. In the 1996 McDonald’s operates website for most of the countries in which we do business, as well as their website: www.aboutmcdonalds.com. In the 1990 and 2000s, Chicken McGrill and Crispy Chicken sandwiches, premiere lettuce and tomato Big N’ Tasty sandwich are added to the U.S menu. World Children’s Day had designated by McDonald’s on November 20, 2002. In the 2006 Olympic years, McDonald’s promotes Grilled and Crispy Wrap in the U.S and launches the worldwide rollout of nutritional information on packaging. In 2008, the global packaging redesign in the Brand’s history to become more unique. Most important is, McDonald’s provide a free Wi-Fi to all customers that dining in their restaurants.
In 1980 USA gave GOLDEN ARCHES RESTAURANT SDN BHD the license to Malaysia to operate McDonald’s. First taste Restaurant McDonald Malaysia is at Jalan Bukit Bintang, Kuala Lumpur on 29 April 1982. Nowadays McDonald’s in Malaysia have 182 restaurant and is currently expanding at about 10-15 restaurant annually. McDonald had create many job opportunities in Malaysia, and McDonald’s in Malaysia more than 7,000 local people with 120 support staff at its headquarters managing in day-to-day action of the business. In Penang and Johor Bahru also have local offices.
Malaysia are consider a Muslim country where by pork are not available for selling in McDonald’s according to Muslim’s dietary laws, chicken and beef are only available in Malaysia like McChicken, Big Mac, Big N’ tasty and so on. The “hamburger” is called as beef burger to avoiding the word “ham” in our country. Additionally, all meats in McDonald’s have to slaughter according to Halal’s method.
Behavioural segmentation dividing consumer based on their attitudes. McDonald’s open in 24 hours, for they who working until late night or they who are not sleeping at night, McDonalds use this service to feed them because not every restaurant are open 24 hours especially middle of the night. Besides that, McDonald’s provide foods that are fast and easily obtain by consumers who are unable to cook. This is way more comfortable and easier and they do not have to waste their time and focus on their work.
Social Factors Psychographic
McDonald’s targeted to various social class which are lower-middle and upper-middle. For example the Mac value which are cheaper and more convenience give for the lower-middle class enjoy their meal. The Big value meal which is quite expensive can be purchase by the upper-middle. In family life cycle, different family unit will look for different type of meal because most families pass through the progression of family life cycle. The value meals are offered in different of portion and size. For example, dual income families usually do not have much time to prepare breakfast for their children; they can order and purchase the family breakfast meal in McDonald’s
McDonald’s using differentiated marketing strategy, targeting in several segments and separate offers for each. McDonald’s always introduce the new low-priced products with the same quality and service for the middle-class income groups of people. For example Fillet O Fish or McChicken each all of them are just below RM10 per set. Beside target for high-class income of people, McDonald’s wants to earn their profit from the middle-class income of people too. Additionally, McDonald’s always target and move on to the crowd pulling centres like shopping malls, airport, and railway station and high ways. As common sense, there always a McDonald’s inside crowded places.
McDonald’s concentrated marketing effort on a segment, McValue, develop services that caters for the needs of particular groups .For example McValue, McValue is a promotion every single days for lunch time and dinner time that is 1pm – 3pm and 6pm-9pm. During the promotion all the meals are discount about 30% for every set of meal. Besides that, McDonald’s provide the breakfast menu which from 4am to 11am which only selling breakfast but burgers and ice-cream and the Weekdays breakfast are provide the low price breakfast which only up to RM4 per set with a McMuffin burger and a cup of tea or coffee with optional. The convenience and the low price attracted the consumers, saving their time and easy to buy even for those who are driving (Drive Thru).
Malaysia is a Muslim country, the culture of Muslim is very important in Malaysia even in food. Pork are not available in Malaysia, therefore, pork burger are not selling in Malaysia McDonald’s and instead by beef burger. All the chicken and beef should be slaughter with Halal’s method. Besides that, McDonald’s also provide special annual meal during the Chinese New Year Celebration, the Prosperity Chicken Burger will be back once in the year of Chinese New Year. The thinking of Chinese are all about prosperity, and this burger may bring prosper for Chinese even it is just the way of marketing. This shows McDonald’s are trying to follow the local of Malaysia.
The value proposition used McDonald’s is more for the same. McDonald’s stands for “friendliness, cleanliness, consistency, and convenience” as introduced by Ray Kroc. McDonald’s provide a good environment for consumer to having their meal. The design for the McDonald’s branches is nice and beautiful. Also Wi-Fi is provided for every branches of McDonald’s as well for consumers to social in network or work. Besides that, the drinks provide by McDonald’s are free for re-fill like coke, coffee and tea. It is friendly consumer.
Marketing environment is means the entire factor and forces outside the marketing that affect marketing management ability to build a successful relationship with the target customer.
The company marketing managers must work closely with other department to implement a strategy and strong marketing plan to help McDonald’s achieve the high sales and efficiency of the operation. For example, the company management has a goal which to satisfaction all the customers. This not just only effort of marketing department but it also related understanding, cooperation and hard work from different department. Human resources department also involve provide substantial training to all McDonald’s staff. Financial department also need to analyze the cost benefits for the marketing and the purchasing must work close to supplier to insure that the marketing plan is on track. Thus, the company must work close to ensure marketing meets the objective and have the goals on the future direction of company.
The relationship between suppliers with McDonald’s is important. To ensure a continuous, good and no disruption supply, McDonald’s must build a strong relationship with the suppliers. To competing with other fast food operator, McDonald’s also need consider that if supplier out of stock and increasing of prices of stock is under monitored and ensure that bottom line of performance is not affected.
Marketing Intermediaries are the companies that help other company to promote, sell and distribute the final goods to final buyers. As we know, McDonald’s is franchise-around the world. Actually franchise system is the part of marketing intermediaries that help McDonald’s to popularize, distribute and expand the market around the world, so it must choose credible franchisee to insure their business performance is standard that set by corporate. Financial intermediaries are important to McDonald’s because it to ensure financial transaction, assistance and insurance coverage for the McDonald’s business to operate normally. McDonald also needs physical distribution firms that help in distribution and transportation of materials and goods around the country to its restaurant.
This will no disruption logistic is important to have enough and smooth restaurant operate to serve customer better in anywhere and anytime.
Customer that weather is household or individual buyer also is important in microenvironment McDonald’s. McDonald’s more on household consumer because McDonald’s have a clear market segmentation that to differentiate the consumer group such as adult, workers and teenager with different type and size/portion of food. Every customer has the potential of affecting the company, hence McDonald’s needs to influence its customer using various types of media such as advertisement.
McDonald’s have many competitors in Malaysia such as KFC, MarryBrown and so on. There are competitors of McDonald’s, which McDonald’s must provide differentiation in term of value and satisfaction than its competitors. McDonald’s should understand customer needs to increase the position in domestic market. For example McDonald’s differentiate from its competitors with through its store quality, offering an expanded range of product of increased perceived value and its marketing. Furthermore, customer preferences have been addressed through an increase in salad offerings reduced fat offerings, and expansion of wireless internet access.
The Demographic environment of a McDonald’s includes features such as age, gender, race, occupation and density of people. So the McDonald’s introduced their products in the field that products can be accepted by the customers. They also study the purchasing power patterns of people according to their age’s level. McDonald’s also decided to meet and product each customer the fast food industry.
Economic environment is about the purchasing power of the people. The fast food industry of Malaysia is increasing day-to-day; this encourages McDonald’s to start their new branch in all the major cities of Malaysia. Before starting the action, McDonald’s also thinks about the base station fast food industry of Malaysia. The purchasing power of the individuals also studied to decide that in which areas they should open their new branch.
The Social and Cultural atmosphere of McDonald’s is when McDonald’s started its business in Malaysia. McDonalds does not produced too much income at the time but with the passage of time the interest of people has developed to fast food and it have become a culture especially for the high class to go. As McDonald’s is an U.S.A based company, it has to make several changes in its modus operandi and also the types of food offered needs to be Halal.
Political conditions of Malaysia are stable and this promotes the foreign investors to come in Malaysia and start their businesses. For those companies who has already begun operating in Malaysia. Government of Malaysia has imposed limitation for McDonald’s to provide Halal food in Malaysia and McDonald’s need to follow that delimitation. And in addition, the government required a 6% of sales tax in payment may cost McDonald’s to lose its sales volume.
McDonald’s product is convenience products, because they are consumer products and services that customers usually buy frequently, immediately, and with a minimum of comparison and buying effort.
McDonald’s provide many of kind of products such like favourite item, breakfast, Happy Meal, Desserts, Beverages and McCafe.
Inside of favourite item length got McChicken, Spicy Chicken McDeluxe, Chicken McNuggets, Ayam Goreng McD (Regular/Spicy), Filet-O-Fish, Double Cheeseburger, Quarter Pounder with Cheese, Big N’Tasty, Cheeseburger, Beefburger, Chicken Burger, Bubur Ayam McD. This all favourite food is for any time per day. It offers 24 Hour service for people except those in shopping centre.
Another of McDonald’s menu item is Breakfast. Breakfast item length is a set of items they include such as coffee/tea or can add an additional 50 cent for hot Milo or 1 ringgit for cold Milo. Inside breakfast items provided are Sausage McMuffin, Sausage McMuffin with Egg, Egg McMuffin, Filet-O-fish, Big Breakfast, Hotcakes (2pcs), and Hotcakes (2pcs) with Sausage, Hash Browns. But this service is only available from 4.00am to 11.00am.
In additional to, McDonald’s menu item also provide Happy Meal. Happy Meal was debut on 1979 (Mahalo Learn Anything). The Happy Meal targets children to visit McDonald more often as every Happy Meal, there is a toy offered. Inside of Happy Meals length got Sausage McMuffin, Cheeseburger, Beefburger, Ayam Goreng McD, Chicken Burger, Hotcakes, Chicken McNuggets. It also service for any time of day except those in shopping centre.
McDonald’s menu item not only meal, also provide Desserts to for all people taste it. McDonald’s Desserts was prepared for those people was after finish meal and continue for the desserts or order dessert only. Such like McDonald’s Desserts slogan “No McDonald’s meal is complete without a delicious dessert. Warm or cold, you name it, we have it.”(McDonald’s menu item). Inside of McDonald’s Desserts length got Sundae Cone, ChocoTop, Flavor Twist, Sundae, CornettoSundae, OreoMcFlurry, CornettoMcFlurry, Shake, Apple Poe, Fruit Cup and French Fries.
McDonald’s menu item also provides Beverage and they can choose their own beverage. Inside McDonald’s Beverage length got Premium Roast Coffee/Tea, Hot Milo, Carbonated Soft Drink, Iced Milo, Ribena, Minute Maid Orange Juice, Iced Lemon Tea and Drinking water, you can select the depth what you want, and the depth include normal, regular and large. Not only that, McDonald’s also provides McCafe. McDonald’s McCafe length have many of kind coffee such like they provide Cappuccino, Flat White, Americano, Mocha, Latte, Espresso, Iced Latte, Iced Mocha, Mocha Frappe, Mango Frappe and Iced Chocolate, same also can select the depth to buy. McCafe also provide dessert such like Chocolate Chip Muffin, Chocolate Brownie and Bluebery Cheesecake. Only three types of dessert are provided by McCafe.
The depth of McDonald’s all products just only got regular and large. McDonald’s all products are consistency, because McDonald’s only sell food and drink, that all is for people eat. They won’t sell like electric item with their products.
Place decision is related to channels that not just about the physical place. It also involves in the management of bringing product to target consumer. In the distribution system, the system performs facilitating, logistical and transactional functions. The distribution decision is included services, market coverage, channel member selection and logistics.
Fast food is the sign of McDonald’s, for customers to receive the product and service including resources is the part of customer buy. A place that meet customer must be near of customers. The common place chosen by McDonald’s is downtown area. The downtown area was selected because it can target more consumers. Other than that, before the place is selected, McDonald’s must determine how much the targeted consumers are willing to pay for the offered atmosphere and physical resources of place.
Via Internet booking
Source: From text book page 73
From diagram 1 we can see the McDonald’s is using multichannel to distribution system. McDonald’s distribute the product via Internet booking or phone order that has no intermediary levels is call as direct marketing channel. In addition, McDonald’s also distribute their product via different branches which located in different place such as supermarket store and waiting consumer to walk in buy. This channel is call as indirect marketing channel.
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McDonald’s kiosk in Malaysia usually is selling desserts that because of weather of Malaysia are hot. The main reason of set up kiosk is to increase the business of McDonald’s with strategy. McDonald’s kiosk always locate at the place that easily visible. The reason chosen the strategy place is targeted to children and teenagers. McDonald’s more on children because children like sweet dessert especially hot weather on Malaysia. Other than that, it also to reduce queuing time for those people just wants to buy the dessert.
With the technology nowadays, most of people is lazy drive out and buy food. That is why McDonald’s introduce the method that selling product via Internet. This method are direct marketing that as shown as the chart above with no intermediary levels which means sell their product directly to customer without passing any intermediary. The benefits of using this method is you can order your food any time. The service is call as McDelivery with 24 hours/7days and the duration of sending the food reach your home is only around 30 minute.
You also can book through by mobile phone with calling 1300-13-1300. In the call you should follow the voice prompt for the instruction. When you would like to use McDonald’s Gift certificate or any relevant valid promotional offers you need to inform. After done the instruction it will proceed to the call agent and you can start the order the food you would like to order. Lastly, just wait the products to be delivered to your house.
Price refers to the value or worth of a product that attracts the buyer to exchange money or something of value for it.
Product Mix Pricing Strategies
International pricing-ƒ The amount of raw material used for each of the product is being fixed. However prices of raw materials in each country differ, hence the different prices of burgers in different countries. In addition, it is also caused by the currency exchange that make the prices of burgers differ.
McDonald’s is using function discount to discount their product. Function discount is offered by the seller to trade-channel members who perform certain functions. When the customer is at meal time to buy their product is have discount.
McDonald’s is using product-form pricing and time pricing. Product-form pricing is different versions of the product are prices differently but not according to differences in their costs. Time pricing is a firm varies its price by the season, the month, the day, and even the hour. McDonald’s is use product-form pricing at the festival and use time pricing at every day. Example like McDonald’s have Breakfast time have Sausage McMuffin is other time not have.
Psychological pricing is a marketing practise based on the theory that certain prices have a psychological impact. It occurs when sellers consider the psychological of prices and not simply the economics. The reference price is often expressed as “odd prices”, a little less than a round of number. Such as RM10.95 or RM8.65, this theory drives demand greater than would be expected if consumers were perfectly rational.
Nowadays, McDonald’s was using four tools of marketing communications mix, there are advertising, sales promotion, personal selling, and the last one Public Relations (PR).For example, under advertising, McDonald’s used newspaper to promote their product items. On the other hand, McDonald’s also using radio to promote their products item. Every season McDonald’s will release some new products to sell it. Such like soon before McDonald’s was release a new Samurai Beef Burger promotion dipped in Teriyaki Sauce with Sakura McFizz and Katsu Curry McShakerFiries (authentic Japanese curry flavour) for a limited time only. This promotion of Samurai Beef Burger was aiming at customers who are both meat and Japanese cuisine lovers.
Also during the Chinese New Year season, McDonald’s also follow the occasion and release burger that meets with the season name, called “Fa Choi Burger”, McDonald’s released this burger to celebrate together with their customers in this joyous occasion. When during the summer season, McDonald’s will release some product items to sell it. The promotions of these seasonal products work hand-in-hand with its advertisement.
Not only that, under sales promotion McDonald’s also will make a promotion like buy one free one promotion but only in a period time with terms and condition applied. They upload coupon sample to the internet and let consumer to download and print it out to get discount also can buy one free one. And the below, it all is an example of McDonald’s to promote their product item. Online promotion is also available especially for McDonald’s breakfast set, whereby customers can download e-coupons from the Internet to enjoy free burger with purchase. From this, McDonald’s was using the Sales promotion tools to promote their product item. (hokangtao.com, august 2012)
Some of restaurants on the normal day will did not make the promotion, but McDonald’s will make the promotion on the normal days, such like McValue dinner and lunch. These two promotions of McDonald’s McValue dinner and lunch were fixed. For example, from 12 noon to 3 in the afternoon and from 6 in the evening until 9 pm, customers can enjoy cheaper price on the burgers sold by McDonald’s. And the Cashier cum waiter or waitress, and face to face with the customer to order the McDonald’s food, that can build a good relationship and loyalty with the customer. From this promotion, they are using the personal selling tools to promote their products item.
After that, McDonald’s also using Public Relations (PR) tools to promote their product item. Under Public Relations, McDonald’s was sponsorship 2010 FIFA WORLD CUP SOUTH AFRICA to build good relationship with the public. And provide a variety of programmes are planned to engage football fans and share the spirit of the tournament. For example, they provide McDonald’s Player Escort Programme, whereby children from around the world to walk hand-in-hand onto the pitch with their football heroes. McDonald’s has supported football more than 25 years at the grassroots and global levels. Since the United States Tournament in 1994, continuing through 1998 in France, 2002 in Korea and Japan 2006 in Germany and 2010 South Africa for the FIFA World Cup, the company has served as an Official Sponsor and the Official Restaurant of the FIFA World Cup. (McDONALD’S ® 2010 FIFA WORLD CUP SOUTH AFRICAâ„¢ Global Sponsorship Fact Sheet)
In my opinion, although McDonald’s is close to perfect, but still got some improvement needed to enhance to satisfaction the customer. Here is some suggestion to improve the current McDonald’s. This issue come from the communication and listening skills of the cashier staff of McDonald’s. Inaccurate input of the customer’s order can result in the incorrect output (customer order). The suggestion that to improve the McDonald’s is data verification system that display the customer’s order on a small screen for customer to check and change if necessary , before the order is submitted into the system.
In addition, the poor Wi-Fi coverage is small and the speed of Internet very slow. This problem come from is because McDonald’s Wi-Fi is open for everyone, so even not customer also can connect to McDonald’s Wi-Fi. The suggestion can give is McDonald’s should put password for the Wi-Fi service and enhance security on Wi-Fi service. McDonald’s can write the password on receipt so that customer can enjoy the free Wi-Fi.
McDonald’s also should improve the speed of internet.
The issue of counter is another problem. Especially at lunch promotion and dinner promotion, that is many people queue waiting for buy but some of counter still unavailable. The solution is McDonald’s should make sure the counter available especially at the moment of many people.
In conclusion, this report is describing the McDonald’s history that first McDonald open in Bar-B-Q restaurant on Fourteenth E streets in San Bernardino, California. In addition, McDonald’s environment is about the factor and forces outside the marketing that affect marketing management ability to build a successful relationship with the target customer with microenvironment and macro environment. In micro environment got the company, supplier, marketing intermediaries, customer and competitors. Macro environment is included demographic, economic, social cultural and political conditions. 4Ps is included the product, place, price and promotion. Product is talk about the goods and services combination that the company offer to the target market. Place is describes about the product in strategy place that target to consumers. Other than that, price is the amount that customer must pay to get the product. Last is promotion, promotion is the activities that communicate the merits of the product and persuade target customers to buy it.
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