mcdonald's business strategy case study

In-Depth McDonald’s Marketing Case Study – I’m Lovin’ It Already.

By Aditya Shastri

McDonald’s has been one of the leading food chains for many years in terms of the quick-service segment. They are a company with a broad understanding of the needs of its customers. 

Today, McDonald’s is the industry’s leader not only in sales volumes but also in profit rates and market valuation. But how did they manage to gain such a strong position? The answer lies in its well-thought-out strategic marketing moves as well as other internal factors. 

That’s why in this case study, we’ll dig deeper into McDonald’s Marketing Strategy in India and globally from a marketing perspective by going through its marketing strategies, marketing mix, marketing campaigns, and SWOT analysis.

So let us start by first learning more about the business model and brand history of McDonald’s.

About McDonald’s

McDonald’s Corporation, or simply McDonald’s, is the world’s largest chain of fast-food restaurants, serving around 69 million customers per day.  Headquartered in the United States, the company began in 1940 as a restaurant operated by Richard and Maurice McDonald.

In 1948, they reorganized their business as a hamburger stand but later in 1955, businessman Ray Kroc joined the company as a franchise agent who subsequently purchased the chain from the McDonald brothers and oversaw its worldwide growth.

The mission of the company is, “To create delicious feel-good moments for everyone” .  

McDonald’s offers its customers a wide variety of its menu items, along with drinks and other merchandise. It is known for its employee satisfaction, innovation, and commitment to quality.

The business model of McDonald’s is intensive, but in short, it is a franchise-based model. It shares the rights of the business with its franchise partners who later operate McDonald’s in select regions. 

In India, McDonald’s is run by two companies, Hardcastle Restaurants Pvt. Ltd (controls South & West India) and Connaught Plaza Restaurants Private Limited (controls North & East India). It first entered India back in 1996.

Now that we know about McDonald’s Corporation and McDonald’s India. Let us now go through the company in greater detail by going through its marketing mix.

What’s new with McDonalds?

Here’s everything that was buzzing around McDonalds recently:

• McD introduced the new “KARTIK AARYAN Meal” inspired by the actor’s personality. We will discuss this in detail below in the marketing strategies.
• McDonalds in India dropped tomatoes in August of 2023 because of rising prices.
• Mcdonald’s giving away free NFTs in Singapore. Details in this news article by Decrypt .
• In July 2023, McDonald’s announced that they are coming up with a new concept called CosMc – a spinoff restaurant.
• McDonald’s opened their first fully automated restaurant in Texas.

Sounds like McDonald’s was quite the talk of the town all this year and rightfully so. Let’s now move on and discuss the buyer persona of McDonalds.

Buyer Persona of McDonald’s

A buyer persona generally refers to the detailed information of an ideal customer of a company. When it comes to Mcdonald’s, people from all countries, ages, and genders enjoy their juicy burgers and fries. Hence, we have focused on the attributes of an ideal buyer at Mcdonald’s.

Buyer’s Persona

Profession:

Graphic Designer

• Seeks quick, convenient meals
• Values cost-effectiveness
• Enjoys variety and occasional indulgences
• Prefers shareable food options

Interest & Hobbies

• Digital Art & Design
• Socializing with friends
• Watching movies and TV series
• Exploring new cafes and restaurants

Pain Points

• Time-strapped due to work
• Dislikes long wait times
• Concerned about food consistency
• Health-conscious
• Prefers a quieter ambiance

Social Media Presence

Marketing mix of mcdonald’s.

A marketing mix is a model that an organization uses to advance its interest in its image or product. The main components of this model are the 4Ps: Product, Price, Place and Promotion. So let us look at McDonald’s marketing mix strategy in the coming section.

We have written a separate blog taking a deeper dive into the marketing mix of McDonald’s if you wish to learn more.

Product Strategy of McDonald’s

Being a fast-food company, it primarily sells burgers, french fries, breakfast items, soft drinks, milkshakes and desserts. 

McDonald’s menus are known around the globe, although there are geographic variations to suit the local preferences & tastes of customers. The company continuously improves its products and services based on the changing needs and tastes of consumers.

The core value of what McDonald’s offers has always been fast service which is a huge value addition. Nowhere else can you get such a range of items at even lower prices with such efficiency, convenience and customer service.

Price Strategy of McDonald’s

The pricing strategy of McDonald’s has always been to offer food at low prices. This is what has allowed the restaurant to be successful for many years.

This also has primarily helped McDonald’s build its reputation as one of the top fast-food brands in the world. However, with the costs of living continuing to rise, McDonald’s has begun offering combos and specials in an effort to entice customers and churn out profits through economies of scale.

In India, the brand came up with a punchy line – “Aap Ke Zamane Mein, Baap Ke Zamane Ke Daam” . This was done back in 2008 to attract lower and middle-class customers to experience the offerings of McDonald’s India and it worked out very well.

Place and Distribution Strategy of McDonald’s

McDonald’s is one of the world’s leading quick-service restaurants (QSR) with over 38,000 restaurants in 100+ countries. It recently opened nearly 1,000 new restaurants globally &  also modernized another 900 restaurants in the US.

It has opened different restaurant formats as well as drive-ins, online ordering, and tying with food delivery partners . These new formats allow the customers to get the desired food at a particular time and place which also helps them to have a better experience overall.

The stores themselves are clean unlike others as they always keep their outdoor seating space sanitized while having indoor seating areas for an elegant ambience.

Promotion Strategy of McDonald’s

McDonald’s uses a lot of promotional techniques as promotional activities help build brand loyalty and interest. It gives people who may not normally go to McDonald’s a reason to go there.

Just like any other company, McDonald’s also sponsors various promotion campaigns to push their brand. Promotions help in creating a sense of community and association between the company and its customers.

Now that we know about McDonald’s offerings and its promotional tactics, let us now go through the core marketing elements of its marketing strategy in the coming section.

McDonald’s Marketing Strategy in India and Globally

With an innovative approach to marketing and consumption patterns through value-added menu improvements, McDonald’s aims to significantly improve market share in key markets through continually improving customer satisfaction and attracting new customers through cost savings, operational efficiencies and improving brand awareness.

So let us look at some of the marketing strategies implemented by McDonald’s over the past years .

A Detailed Focus on McDonald’s Franchise Model

McDonald’s has made such a franchise model that many companies even today replicate this model in their operations. 

Why did their model work? Two main factors contributed to the success of the Model: First, McDonald’s made a huge investment to ensure that the quality of services it provided was consistent across all its franchise outlets. The company invested in acquiring its products from local regions and crafted menus that catered to individual regions’ palettes.

The above two factors have worked wonders for McDonald’s and paved the way to enter and expand its reach globally.

Catering to All Age Audience

Being a fast-food restaurant, MC Donaldss decided to cater to all ages. Since then McDonald’s has scouted ways to market its offering for all age groups of a family.

Mcdonald’s came up with options like Happy Meal to target children and also offered its meals in bigger packages and different portion sizes to ensure that hunger be it small or large can be satisfied at Mcdonald’s. 

McDonald’s – I’m Lovin’ It…. Para Pap Pap Paa:

“I’m Lovin’ It…  Para Pap Pap Paa” is a very well-known jingle that has been used by McDonald’s for a very long time now.

This jingle highlights the positive experience one can have while dining at McDonald’s. The jingle is memorable because it speaks about how happy consumers are during their meals there, and how helpful and friendly the employees are.

Brand Mascot of McDonald’s

What is the best McDonald’s brand mascot? A funny clown character that McDonald’s can successfully market to both children and adults. The brand mascot strategy was first implemented by McDonald’s in 1963 and since then this mascot has become an integral part of the company’s legacy. 

Collaborations with McDonald’s

McDonald’s has a long history of collaboration with various companies and artists. The motive behind these collaborations is to maintain its brand reinforcement in the minds of its customers. This goes beyond simply creating advertising campaigns that promote the value of its products. 

It very recently collaborated with BTS – the very popular South Korean Music band where it introduced a special McDonald’s meal called the BTS Meal. Likewise, it has collaborated with artists like Travis Scott, and J Balvin as well as Companies like Coca-Cola .

Digital Marketing Strategies of McDonald’s

By adopting digital marketing practices, McDonald’s has been able to increase its brand awareness and create demand for its offerings. The information promoted is similar to the ones used in traditional marketing platforms such as TV, billboards, newspapers, etc., however, the execution of the same content differs. 

By encouraging its customers to click pictures of their meals and post them on various social media platforms. This growing food photography trend has helped McDonald’s to lure new customers, in fact, between the period of September 2018 and February 2019, there were 4.9 million McDonald’s logos posted on Twitter globally.   

The company also adopted SEO practices, where it found that its “organic” practices perform better than “sponsored” promotions. As per Simplilearn, in December 2019, McDonald’s received 90.7% of the search traffic through organic searches by their customers, while the remainder was received through sponsored activities.  

McDonald’s has increased its engagement with its customers by interacting with them on social media platforms like Facebook and Instagram. Also communication of various offers and discounts through social media have also been a factor contributing to the increase in customer traffic on its website and App.

By incorporating digital elements in McDonald’s marketing strategy, the company has been able to maximise its reach.

Are you interested in learning digital marketing strategies that can help your business grow, then I recommend you check this blog on “ IIDE’s PG in Digital Marketing ROI ” so that you can understand how investing in a PG course can help you reap benefits for your business in the long run.

Marketing & Advertising Campaigns of McDonald’s India

A marketing campaign can have many goals, but at the core, they are all about getting more customers. An effective and well-timed campaign will create a demand which then supports the product or service. 

When it comes to McDonald’s, it has a very strong strategy in place. Right from showcasing its delicious burgers along with bringing out the positive “McDonald’s vibe” to ending the commercials with slogans like, “I’m Lovin’ It…  Para Pap Pap Paa” .

So let us look at some of the popular campaigns of McDonald’s.

Kartik Aaryan Meal by Mcdonald’s India  

Mcdonald’s India introduced the new Kartik Aaryan Meal including burger, fries, and a pizza puff with a different packaging than unusual. The meal also features a QR Code, which upon scanning, fans can take a selfie with him virtually. 

We Get It – Campaign & Commercial Ad  

Another Campaign launched by McDonald’s India was “We Get It” revolving around the craziness of life and how McD continues to make you feel special and give the best experience through that. 

There’s A McCafe for Every Moment – A Marketing Campaign of McDonald’s India

McDonald’s India came up with this campaign to highlight its beverage range, McCafe and how they are there for all the good, bad and neutral moments of life. 

This campaign was released back in 2017, showcasing all the minute elements of life through a catchy theme song.

Family time means McDonald’s #Mealsmakefamilies – A Marketing Campaign gaining lots of love

McDonald’s India came up with this campaign to highlight how meals bring families together.

This campaign which was launched recently showcases some relatable moments people share with families while having a McDonald’s meal.

Marketing & Advertising Campaigns of McDonald’s during the Covid-19 Pandemic:

McDonald’s released a series of advertising commercials showcasing how so many things have changed since the pandemic . The basic idea behind the campaign was to highlight how life has changed but McDonald’s is still there, offering the same positive experience with extra hygiene and safety measures.

 #MatchedByYou – A Marketing Campaign of McDonald’s India

McDonald’s introduced an exciting campaign #MatchedByYou. It shows a love triangle between burgers, fries, and cola. This campaign showcased the offering of food combos for a price as low as ₹45.

After reading the McDonald’s Marketing Strategy, I suggest that you take a deeper look into the SWOT Analysis of Mcdonald’s .

Top Competitors of McDonald’s 

Like fast fashion, fast food outlets are also trying to get a share of the monopoly that McDonald’s once enjoyed. Here are a few top competitors of McDonald’s in India as well as internationally:

1. Top Competitors in India

• Burger King 
• Jumbo King 
• Wow Momo’s 
• Local Food Joints 

2. Top Competitors Internationally

• Smokin Joes
• Burger King

Failed Campaigns of McDonald’s

We looked at the campaigns that brought the essence of McDonald’s to everyone’s screen but now let’s look at some of the failed campaigns that didn’t hit a chord with the audience. 

1. #McDStories on Twitter  

In the late 2010s, McDonald’s introduced a hashtag on Twitter –  #McDStories & that encouraged their fans to share their stories revolving around the Happy Meal. 

What the brand expected was stories that would inspire people to get together with their friends and family to enjoy a Happy Meal. 

Instead, Twitter users started using this hashtag sarcastically and shared their negative experiences with McDonald’s.

Here’s one of the tweets using #McDStories:

2. Controversial Ad in India 

In 2023, McDonald’s released a commercial ad where a customer was wooing a female staff member. The ad didn’t go well without the viewers and faced a lot of backlash. 

Q1. What is the marketing strategy of McDonald’s?

Ans: McDonald’s marketing strategy adopts an emotional approach by marketing Ads that evoke emotions, such as togetherness, joy, and laughter among its target audience. The only aim in evoking such emotions is to show that this brand can deliver an enjoyable experience and make their moments cherishable.

Q2. What type of strategy does McDonald’s use?

Ans: McDonald’s has heavily focused on its pricing strategy by keeping its price as low as possible with the aim to deliver happiness in the lowest possible price.

Q3. What is the marketing strategy of McDonald’s in India?

Ans: McDonald’s marketing strategies in India adopt 5ps: product, price, place, promotion and people. The primary aim of all these 5 Ps is to deliver value to its products and build a relationship over the long run.

Q4. Why is McDonald’s marketing so successful?

Ans: McDonald’s has been working on creating a strong brand through its marketing efforts involving traditional and digital marketing channels. Such consistent communication has helped the community to build a strong relationship with their customers contributing to the success of their marketing efforts.

Q5. Who is the target audience of McDonalds?

Ans: McDonald’s caters to everyone, be it children, elders, working professionals, etc. They have curated meals that can cater to both small and large hunger, making their products a go to meal for their audience. 

McDonald’s is one of the world’s most recognized fast-food restaurants. With annual revenues in excess of $19 billion, it is no doubt that McDonald’s has a major influence on society in terms of food choices. 

Its reach extends far beyond the borders of its home country and geographically encompasses many nations around the globe. With a strong presence on both offline and online marketing, and cruise control over production and distribution, McDonald’s looks very well placed to take up industry-changing challenges.

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Marketing & Branding

• 17 Apr 2020

McDonald’s Marketing Strategy: What Your Company Can Learn

Effy Pafitis

This article is part of our ‘Marketing Strategies’ series, an in-depth look at how some of the world’s most successful companies promote their brand and their products.

Few global brands are as highly recognisable as fast-food giants, McDonald's. Universally identifiable by its famous brand imagery , meal names, and mascot, McDonald's is a prime example of a business that has successfully leveraged smart marketing to support impressive growth.

As a result, the global franchise now boasts by far the highest brand value of any fast-food company, estimated at a  whopping $130.3bn  as of 2019. Runner-up Starbucks' worldwide brand value pales in comparison, at $45.9bn for the same period.

So how did this once modest hamburger restaurant rocket to lucrative international domination – and how does it stay there? And – most importantly of all – what can modern business owners learn from its approach?

McDonald's Marketing Strategy

Initially founded in 1940 at a single location in California, McDonald's quickly became well known locally for its high-quality hamburgers and satisfactory customer service. Eight years later, it became one of the first restaurants to make the transition from traditional sit-down table service to a fast-food business model and added exciting burger variations and milkshakes to its menu. Spurred on by the success of this development, it launched its first franchise agreement in 1952, a decision that would lead to exponential worldwide growth . Indeed, the company now operates almost 40,000 restaurants across the globe and attracted reported international revenues of  around $21bn  in 2018.

The company focused on broad public awareness from the early stages of its development, aiming to create strong brand recognition and market penetration, upon which to promote its growing franchise business further. As its customer base grew, the company investigated its demographics further, to facilitate targeting.

McDonald's still maintains this approach, investing in online and offline marketing strategies that promote its clear, brand-centric messaging to broad audiences, while using other channels such as its dedicated mobile app to reach and retain loyal customers.

Customer Profile

As a result of its mass marketing techniques and broad appeal as a fast-serving, affordable eatery, McDonald's has a varied consumer demographic . The chain is most frequented by shoppers under the age of 24, as well as between the ages of 35 and 54. Both male and female, buyers typically have low to average incomes, with an affinity for the fast-food industry in general. They are defined as brand-loyal, casual diners, with the average spend per customer estimated at $7.79.

A large proportion of these customers are parents to young children, attracted by the brand's family-friendly atmosphere and menu offering. This particular segment was first targeted through the launch of the Happy Meal in 1979, the hugely popular children's meal package that includes a free, themed toy.

McDonald's confirms its broad target market, stating on its website that it aims to offer a "friendly, fun environment for everyone... to enjoy. This means appealing to families who love our iconic Happy Meal, to workers grabbing breakfast on-the-go or eating in".

The brand collects primary market research data to guide its marketing strategies, and ensure it reaches its identified audience demographic. Surveys and questionnaires are conducted in-store, across its social media channels, and via the McDonald's mobile app, to determine customer satisfaction regarding food quality, service, delivery, and more. Its forum website, McDonald's Community, and other digital channels are also closely monitored to capture interactions with, and feedback left by, customers.

McDonald's invests heavily in billboard and broadcast marketing, utilising a mammoth advertising budget of  over $1.5bn  in the US alone in 2018. Digital marketing campaigns work to complement its offline promotional messaging, bringing consistent content to varied audiences not expected to be reached by outdoor, TV and radio advertisements.

Broadcast Marketing

McDonald's uses TV and radio to engender general brand awareness, as well as promote new menu items, meal deals, and philanthropic initiatives . Its broadcast channels and timings are chosen specifically for maximum viewership and listenership. In fact, McDonald's is estimated to  have spent $52.9m  on TV ad airings in the US during November 2018 – the height of the widely-viewed NFL season – offering an indication of the importance the fast-food company places on securing the most prominent broadcast ad spots.

The company confirms its objective to secure large-scale awareness, stating that, "the majority of our campaigns are communicated to everyone to ensure they have a broad reach. You may have seen us on TV or heard us on the radio!"

Billboard Ads

Traditional billboard advertisements are also widely used by McDonald's, focusing on the same marketing objectives and content as those that underpin its broadcast ads. Ranging from static to digitally interactive billboards, placed in prominent locations with high footfall and visibility, the company endeavours to maintain positive brand perception and affinity among its target audience, as well as associated consumer groups.

This is an excellent example of utilising various promotional techniques that reinforce the same goals, thus encouraging greater overall success, compared to campaigns that are delivered via one method alone.

Outdoor Ambient Marketing

McDonald's also executes creative, captivating outdoor ambient marketing. Ambient advertising is described as placing ad material in extremely unusual or unexpected places, on objects that are not usually utilised for promotional purposes.

McDonald's has adopted this sub-category of guerilla marketing to evoke a more significant impact on consumers. The McDonald's Massive McMuffin Breakfast campaign is an example of this. Throughout 2010, the company placed giant paper McDonald's takeaway bags across prominent streets in New Zealand, labelled with the name of its new breakfast menu item. The unmissable, unexpected imagery drew considerable attention from passersby (supported by the many photos of the spectacle that onlookers shared to social media), successfully raising awareness for the McMuffin breakfast.

Other examples include the brand's street markings across pedestrian road crossings, designed to make the typical horizontal crossing lines appear as though they are a portion of fries, protruding out of a McDonald's branded fries' box.

Digital Marketing

The brand uses online advertising to supports its awareness and demand generation goals. The content utilised online remains consistent with McDonald's TV ad and billboard imagery, though both text and graphics are tailored to ensure maximum performance across the particular social media platforms used, including Twitter, Facebook and Instagram .

Capitalising on the increasing consumer trend of food photography, McDonald's encourages customers to share photos of their meals online, with great success. In fact, McDonald's was the second most pictured brand on Twitter, with  4.9m logo mentions  on the social media platform worldwide between September 2018 and February 2019.

The company also embarks on search engine optimisation (SEO) campaigns, though its organic SEO strategy outweighs paid promotion. As of December 2019, 90.7% of its search traffic to mcdonalds.com was organic, with just 9.3% obtained as a result of paid keywords.

McDonald's proudly adopts a combination of traditional and guerilla marketing styles to promote its advertising messaging to mass audiences, as well as its primary customer base. The company invests almost $2bn of ad spend in conducting creative campaigns across delivery methods. 

A portion of this funding goes to the advertising agencies hired by the brand to execute major marketing campaigns, as well as support geographic segmentation to tailor the varying marketing styles used across international markets. 

Indeed, the brand utilises market research data to make decisions regarding its messaging and menu modification per geographical region. In addition to editing its advertising text to incorporate cultural references, McDonald's seeks to satisfy consumers by offering meals that prominently feature local ingredients favoured by buyers. For example, meals featuring Cypriot cheese halloumi are promoted to the Cyprus and Greece region, benefiting from the familiarity and popularity of this local ingredient among consumers in those countries.

Key Campaign

Despite geographic segmentation, McDonald's brand identity remains as valuable and identifiable in its newer markets as anywhere else in the world. Its infallible brand recognition is evidenced by one of its most simple, yet effective, marketing campaigns: the 'Follow the Arches' 2018 billboard campaign. 

Executed in Toronto, Canada, the restaurant placed directional billboard ads along busy streets and highways, pointing the ads' audiences towards their nearest McDonald's store using phrases such as "on your right", "next exit", and "just missed us". Each billboard featured just a cropped portion of the brand's logo, showing a small section of the golden arches alongside the direction phrase, and backed upon McDonald's trademark red hue. This clever ad demonstrated that consumers did not need to see the full brand logo to recognise McDonald's imagery and associate this with its fast-food offering and value proposition.

Succeeding in increasing customer footfall in close-by McDonald's stores, the campaign was also heralded internationally for its elegant approach, winning the 2018 Outdoor Grand Prix award at the Cannes Lions Festival.

This campaign serves as a wonderful example, showing business owners that effective marketing does not need to be visually complex, or stray far from core brand identity, to garner favourable results.

McDonald's has exhibited impressive growth since its establishment in 1940, in part thanks to its successful marketing strategies that have equipped the brand to expand to new markets. Now boasting almost 40,000 restaurants worldwide, the company leverages its advertising prowess to maintain valuable brand recognition and affinity.

McDonald's uses both online and offline promotional channels to broadcast its awareness messaging to mass audiences, while also leveraging valuable market research to facilitate regional personalisation, and address its customer base.

Marketing Strategies

Brand Strategy

Offline Marketing

Case Studies

Food and Drink

Guerrilla Marketing

McDonald's

Table of Contents

Mcdonald's consumer profile, mcdonald's advertising strategy , promotion for broadcast, billboard ads, outdoor ambient marketing, mcdonald's digital marketing strategy, become a digital marketer in 2022, mcdonald's marketing strategy - a case study.

In 1940, California was where the first McDonald's opened. It became well-known quickly for its tasty hamburgers and friendly service. Eight years later, it was one of the first places to switch from traditional table service to fast food. It added new kinds of burgers and milkshakes to its menu. The success of the development led the company to sign its first franchise agreement in 1952, which led to rapid growth worldwide. The company runs about 40,031 restaurants worldwide, and sales in other countries brought in about $21.076 billion in 2019.

McDonald's marketing strategy has helped the company achieve the success it commands today. From the start of its growth, the company wanted to build strong brand recognition and market penetration to help promote its growing franchise business. As the company's number of customers grew, they did more research on demographics to help them target easily. McDonald's marketing strategy includes investing in online and offline marketing methods that spread its clear, brand-centered messages to a large audience and using other channels like its dedicated mobile app to reach and keep loyal customers.

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McDonald's has a wide range of customers because it uses mass marketing and has low prices at fast-food restaurants. Most of the chain's customers are between 35 and 54. Buyers, both men and women, often have low to average incomes. They are known as brand-loyal casual diners who spend an average of $7.79 each time they eat.

Many of these customers are parents of young children who like that the brand's atmosphere and food are good for families. This market group was first targeted in 1979 when Happy Meal, a set of children's meals with a free-themed toy, was introduced. 

McDonald's website wants to create a "pleasant, entertaining environment for everyone to enjoy." This shows how many different kinds of people it wants to attract. The brand does primary market research to determine how to market itself and make sure it fits the demographics of the people it wants to reach. McDonald's uses surveys and questionnaires in stores, on social media, and through its mobile app to find out how happy customers are with the food, service, delivery, and other things. McDonald's Community and other digital channels are always being watched to keep track of what customers say and do.

McDonald's spends a lot of money on billboards and TV ads. In 2018, the company spent nearly $1.5 billion on advertising in the US alone. Outdoor, TV, and radio ads aren't likely to reach many people, so digital marketing strategies are used to send consistent information to people who aren't likely to see or hear the ads.

McDonald's marketing strategy uses TV and radio to get the word out about its brand and promote new menu items, meal discounts, and charitable work. Its broadcast channels and times are chosen so that most people will watch or listen. In November 2018, when the NFL season was at its peak popularity, McDonald's is expected to have spent $52.9 million on TV ads in the United States. This shows the importance of the fast-food chain getting the most prominent broadcast ad positions.

McDonald's has a lot of traditional billboard ads, which have the same marketing goals and content as its TV ads. With billboards that range from static to digitally interactive and are placed in high-visibility, high-traffic areas, the company tries to keep its target demographic and other connected consumer groups thinking positively about its brand.

This is a great example of how multiple ways to promote the same goals can make the campaign more successful compared to campaigns that only use one method.

McDonald's also does creative and interesting outdoor ambient marketing. Ambient advertising is when promotional materials are put in places or on things that are very unusual or unexpected or that aren't usually used for advertising. McDonald's is using this type of guerrilla marketing to make more of an impact on customers. McDonald's campaign shows this for its "Massive McMuffin Breakfast." During the whole year of 2010, the company put up big paper takeout bags with the name of its new breakfast item on major streets in New Zealand. The unexpected and hard-to-miss image got a lot of attention from people walking by, as shown by the many photos of the scene people took and shared on social media. This helped promote the McMuffin breakfast.

The brand's street markings at pedestrian road crossings are another example. They are meant to look like fries sticking out of a McDonald's-branded package of fries.

Online advertising helps the brand reach its goals of building brand awareness and creating demand. The information used online is similar to what you might see in a McDonald's TV ad or on a billboard. However, both the language and the graphics are made to work best on the social media platforms used, such as Twitter, Facebook, and Instagram. By asking customers to post pictures of their meals online, McDonald's takes advantage of the growing food photography trend. In fact, between September 2018 and February 2019, 4,9 million logos of McDonald's were posted on Twitter around the world. This made McDonald's the second most pictured brand.

The company also works on search engine optimization (SEO), but its "organic" SEO method does better than "sponsored" promotion. As of December 2019, 90.7% of the search traffic to mcdonalds.com came from natural search results, while 9.3% came from sponsored keywords.

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McDonald's marketing strategy in the digital medium includes customer interactions through social media like Facebook and Instagram. The customers interact with the brand and with each other on social media. Also, the company offers various discounts and coupons through their social media pages and the company app. McDonald's was one of the few companies that performed well during the 2000s recession. The reason for the success was that the company communicated its strategy to the consumers.

McDonald's digital marketing strategy allowed the company to fight back rumours circulating on social media in 2018. The company got  a Long Term Excellence Award from the Marketing Society. The company responded directly to the allegations that it faced and was able to get its message out in the open. 

McDonald's marketing strategy across the various offline and online methods has allowed the company to maintain its leadership position in the fast-food business. The target audience is families that allow most of the population to feel comfortable at the restaurant. McDonald's marketing strategy across the digital channels helps the company communicate clearly and directly.

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McDonalds Business Strategy and Competitive Advantage

McDonald’s business strategy utilizes a combination of cost leadership and international market expansion strategies. Franchising form of new market entry is utilized within McDonald’s business strategy to a great extent. The fast food chain has one of the largest property portfolios on the world and it is a giant real estate company. McDonald’s generates only a fraction of its profit from food and drinks sold by franchisees and the majority of income is generated by renting leased property to franchisees with a considerable mark-up.

Moreover, product and service standardization lies in the cornerstone of McDonald’s business strategy. McDonald’s restaurants offer substantially uniform menu that comprises  hamburgers and cheeseburgers, Big Mac, Quarter Pounder with Cheese, Filet-O-Fish, several chicken sandwiches, Chicken McNuggets, wraps, french fries, salads, oatmeal, shakes, McFlurry desserts, sundaes, soft serve cones, pies, soft drinks, coffee, McCafé beverages and other beverages. [1]

It is important to note that along with maintaining product and service standardization, McDonald’s takes into account local tastes and preferences, when developing its menu and engaging in marketing efforts.

McDonald’s competitive advantage is based on the following points:

• Cheat prices is McDonald’s main competitive advantage. The company is engaged in an extensive utilization of economies of scale to achieve the cost advantage.
• True to ‘fast food’ format of its restaurants, McDonald’s is famous for the speed of customer service without compromising the quality of the service.
• Universality of the taste to a great extent represents another base of McDonald’s competitive advantage. Big Mac tastes the same almost all over the world due to the use of the same ingredients in the same quantities and application of the standardized ways of cooking around the globe. Such a consistence in taste has positive implications on consumer loyalty.

In late 2020, under the leadership of new President and CEO Mr. Chris Kempczinski the fast food tycoon announced the Accelerating the Arches growth strategy which is based on the following principles

• Gaining maximum return on marketing investments
• Commit to the core
• Doubling down on the 3D’s: Digital, Delivery and Drive Thru

McDonald’s Corporation Report contains the above analysis of McDonald’s business strategy. The report illustrates the application of the major analytical strategic frameworks in business studies such as SWOT, PESTEL, Porter’s Five Forces, Value Chain analysis, Ansoff Matrix and McKinsey 7S Model on McDonald’s . Moreover, the report contains analyses of McDonald’s leadership, organizational structure and organizational culture. The report also comprises discussions of McDonald’s marketing strategy, ecosystem and addresses issues of corporate social responsibility.

[1] Annual Report (2021) McDonald’s Corporation

McDonald's Corporation: The World's Leading Fast Food Chain [Case Study]

Devashish Shrivastava , Anik Banerjee

McDonald's Corporation is an American fast-food organization established in 1940 as a café by Richard and Maurice McDonald, in San Bernardino, California, United States. They rechristened their business as a burger stand and later transformed the organization into an establishment; the Golden Arches logo being presented in 1953 at an area in Phoenix, Arizona.

Ray Kroc, a businessperson, joined the organization as an established operator in 1955 and continued to buy the chain from the McDonald's siblings. McDonald's had its base camp in Oak Brook, Illinois, and moved its worldwide base camp to Chicago in mid-2018.

McDonald's is worth $185+ bn today. It is the world's biggest eatery network by revenue. It was last registered to be serving 69+ million customers each day in more than 120 countries across over 39,000 outlets.

Although McDonald's is best known for its burgers, cheeseburgers, and french fries, its menu also includes chicken items, breakfast things, sodas, milkshakes, wraps, and sweets. In light of changing buyer tastes and a negative backfire on account of the wretchedness of its food, the organization has added mixed greens, fish, smoothies, and natural products to its offerings.

McDonald's Corporation's income originates from leases and charges paid by the franchisees. According to two reports distributed in 2018, McDonald's is the world's second-biggest private manager with 1.7 million representatives (behind Walmart with 2.3 million workers).

Here's bringing you the McDonald's company profile that will present to you McDonald's company overview, when was McDonald's founded, McDonald's growth over the years, about McDonald's, McDonald's owner name, founder of McDonald's corporation, McDonald's history and background, McDonald's case study marketing, and more.

McDonald's - Company Highlights

McDonald's - Startup Story and History McDonald's - Mascot/Logo McDonald's - Business Model And Market Strategy McDonald's - Target And Mission McDonald's - Growth McDonald's - Restaurants And Services McDonald's - Future

McDonald's - Startup Story and History

Richard and Maurice McDonald in 1940, opened the primary McDonald's at 1398 North E Street at West fourteenth Street in San Bernardino, California; however, it was not the McDonald's you know today. Ray Kroc made changes to the siblings' business and modernized it.

The siblings presented the "Speedee Service System" in 1948 by extending the standards of cutting-edge drive-thru eatery that their antecedent White Castle had tried over two decades earlier. McDonald's emerged with a delivery model where it made its food on a supply belt and delivered it within 2 minutes.

It looked like a fantastic and impossible eatery that had:

• Only burgers, fries, and shakes on the menu • No plates or waiters to serve the customers

However, when Ray Kroc came, he was astonished by the never-ending waiting lines that were there waiting for their orders from McDonald's.

Kroc was then 50 already and was selling milkshake mixers door to door. Ray Kroc had earlier tried his hand in many things but never had attained success in his whole life. He already worked as a musical director, pianist, and had also worked as a real estate guy, in the paper cup industry, and as a seller of kitchen appliances, but he couldn't hold on to one thing among them all. Thus, Kroc was a person who lived from paycheck to paycheck.

Kroc came to McDonald's to deliver an absurd order of 8 milkshake mixers for just one area. He wondered "why would someone want to make 40 milkshakes at a time?" This is why he drove to California, at McDonald's to see the place himself.

Seeing the huge demand for McDonald's burgers, fries, and shakes, Kroc sensed a huge opportunity. He soon pushed the founders of the store to embrace a franchise model. The McDonald's brothers who owned the business, were living a comfortable life then, getting rich by the day, and buying Cadillacs as they filled their pockets. They didn't have vision nor they were eager to expand. However, Ray convinced them and rushed to work, as soon as he did that.

He assumed the role by taking 2 major steps back to back:

• Mortgaging his house when he was already 52
• Opening 18 new outlets in the very first year

This has helped the company scale big time, and McDonald's now boasts of:

• Serving 2.3+ billion burgers a year
• Serving 39,000+ restaurants across more than 120 countries
• Being the 4th largest employer in the world
• Being the largest toy distributor in the world

Though it was Ray's idea and the expansion was promising, the McDonald's brothers made an unfair deal with him. Kroc was allowed only 2% of the profits. McDonald's being to scale aggressively but the founders of McDonald's wasn't really happy with Ray and his scaling. This is why Ray borrowed and bought them out for $2.7 mn, thereby becoming the 100% owner of McDonald's.

The organization attributes its success to Ray Kroc. Kroc later bought the McDonald siblings' value in the organization and was responsible for McDonald's overall reach. He was seen as a forceful colleague, driving the McDonald siblings out of the business. Kroc and the McDonald's siblings battled for control of the business, as recorded in Kroc's life account.

The San Bernardino eatery was torn down (1971, as indicated by Juan Pollo) and the site was offered to the Juan Pollo chain in 1976. This zone currently fills in as central command for the Juan Pollo chain, and a McDonald's and Route 66 museum.

With the development of McDonald's into numerous universal markets, the organization has turned into an image of globalization and the American lifestyle. Its unmistakable quality has additionally made it a regular point of open discussions about heftiness, corporate morals , and shopper obligation.

McDonald's - Mascot/Logo

The first mascot of McDonald's was a cooking cap over a burger who was alluded to as "Speedee" . In 1962, the Golden Arches supplanted Speedee as the all-inclusive mascot. The image of jokester Ronald McDonald was presented in 1965. Ronald McDonald showed up to promote amongst children.

On May 4, 1961, McDonald's initially petitioned for a U.S. trademark on the name "McDonald's" with the portrayal "Drive-In Restaurant Services". By September 13, McDonald's, under the direction of Ray Kroc, petitioned for a trademark on another logo—a covering, twofold curved "M" image.

Before the twofold curves, McDonald's used a solitary curve for the design of its structures. Even though the "Brilliant Arches" logo showed up in different structures , the present form was not utilized until November 18, 1968, when the organization was given a U.S. trademark.

McDonald's - Business Model And Market Strategy

The business and revenue model of McDonald's includes almost 37000 outlets which spread to more than 120 nations. Today, McDonald's is the biggest eatery network on the planet in terms of income.

Initially launched as a Drive-In Hamburger Bar, the idea was advanced in 1940 by The McDonald Brothers, Richard James (Dick), and Maurice James (Mac) McDonald. It was after the presentation of the Speedee Service System with shakes, fries, and burgers costing as low as 15 pennies that the McDonald Brothers started the establishment of McDonald's Hamburgers.

In 1954, Ray Kroc turned into the establishment operator of the McDonald Brothers. The main McDonald's eatery was opened by Kroc in 1955 in Des Plaines, Illinois, USA. It was in the year 1961 that the rights to the eating joint of the kin were obtained by McDonald's for a powerful total of $2.7 million.

You may likewise be astonished to realize that when the first McDonald's eatery opened, the extremely well-known McD french fries were eaten with no ketchup! The revenue model of McDonald's, the world's quickest developing food chain, is an interesting one.

McDonald's - Target And Mission

McDonald's endeavours hard to be its clients' "most loved spot and approach to eating". McDonald's plan of action is fixated on the ground-breaking strategy "Plan To Win", which is placed into requests around the world.

With the mission of "Quality, Service, Cleanliness, and Value", McDonald's has clung to each of these characteristics. Client experience is improved by the selection of five fundamentals: people, products, place, price, and promotion.

Additionally, McDonald's plans to give high-review nourishment, at effectively reasonable costs to individuals over the globe. The deals at McDonald's are furrowed through an efficient deals channel which guarantees remarkable consumer loyalty on all occasions.

Astounding Vision

When Ray Kroc opened the Original McDonald's in Illinois, he had a dream of expanding the franchise across the globe with more than 1000 outlets in the States itself. Remaining consistent with its guarantee, McDonald's widened its worldwide handle by opening joints outside the US as early as 1967.

The first international outlets were opened in Canada and Peurto Rico. By January 2018, McDonald's was situated in 120 nations and had about 37200 cafés with 1.9 million workers. It was serving more than 69 million individuals every day. At one point in time, McDonald's was opening a new outlet every 14.5 hours!

Significant Growth Strategy

McDonald's has clutched a promising development technique to serve customers and spread its wings. The presentation of the "Speed Growth Plan" in March 2017 enhanced the development of the business.

McDonald's development system depends on retaining, regaining, and converting. McDonald's strives to hold on to its old clients, recapture the lost trust, and convert easygoing clients into ordinary ones.

What's more, it has additionally embraced three quickening agents: digital, food delivery, and experience of things to control its monstrous development. It keeps on reshaping cooperation with clients and raising the level of consumer loyalty and experience through innovation and human endeavours.

Decent Variety

Monetarily, McDonald's has affected the world more significant manner than some other organizations. McDonald's adheres to the conviction "Decent variety is Inclusion" and doesn't leave a solitary opportunity to make each person from every network feel regarded. Its suggestion of "Decent variety is Inclusion" has affirmed its situation at the top position.

The McDonald's way of life revolves around the following: customer-obsessed, better together, and committed to lead. These coupled with its conviction has caused the fast-food chain to exceed expectations in the field of business enterprise and showcasing.

McDonaldization

McDonald's can appropriately be named as one of the best organizations to be involved in the worldwide system. The worldwide broadening of the McDonald's is regularly alluded to as "McDonaldization." Its accomplishment in more than 120 nations can be credited to its hierarchical structure.

The hierarchical structure of McDonald's mulls over expanding localization, and in this way, the entire plan of action of McDonald's is normally redone thinking about the mass intrigue in different nations.

Fruitful Acquisitions

The McDonald's Corporation Mergers and Acquisitions (M&A) have, since its inception, entertained itself with cautious acquisitions. Donato's Pizza which is a Midwestern chain of 143 eateries was obtained by McDonald's on 6 May 1999. Aside from securing Donato's, it acquired the Boston Market on 18 May 2000. Boston Market is a drive-through eatery chain that essentially focuses on home-style sustenance.

Supporting Employees

McDonald's doesn't, in any capacity, hamper the development of its workers. It bolsters its representatives in every possible way and empowers them to set up business systems.

At McDonald's, the work environment is brimming with positivity, connections are advanced, professional openings are supported, and business development is sustained.

Coaches, good examples, and backers are accessible at all times to direct the employees on successful initiatives, professional procedures, and prosperous business.

Engagement Of Community And Education

Aside from being one of the best good-quality fast food options, McDonald's investigates every possibility to endeavour for the network it serves. It effectively takes part in network administration and continues to have a critical effect on assorted networks.

The Global Diversity, Inclusion, and Community Engagement Team alongside its key accomplices have fabricated cherished relations with different network-based associations. McDonald's Hamburger University readies its workforce to maintain the multi-billion dollar business and worldwide initiative improvement programs.

McDonald's - Growth

McDonald's eateries are found in 120 nations and serve 69 million customers each day. McDonald's operates 39,000 restaurants/cafés around the world, utilizing more than 210,000 individuals as part of the arrangement. They help operate 2,770 organization possessed areas and 35,085 diversified areas, which incorporates 21,685 areas diversified to regular franchisees, 7,225 areas authorized to formative licensees, and 6,175 areas authorized to remote affiliates.

Concentrating on its centre image, McDonald's started stripping itself of different chains it had gained during the 1990s. The organization possessed a large stake in Chipotle Mexican Grill until October 2006 when McDonald's was completely stripped from Chipotle through a stock exchange .

Until December 2003, it likewise claimed Donatos Pizza, and it claimed a little portion of Aroma Café from 1999 to 2001. On August 27, 2007, McDonald's sold Boston Market to Sun Capital Partners.

Outstandingly, McDonald's has expanded investor profits for 25 back-to-back years, making it one of the S&P 500 Dividend Aristocrats. The organization is positioned 131st on the Fortune 500 of the biggest United States companies by revenue.

In October 2012, its month-to-month deals fell without precedent for nine years. In 2014, its quarterly deals fell without precedent for a long time, when its deals last dropped for the whole of 1997.

In the United States, McDonald's accounts for 70% of sales in drive-throughs. McDonald's shut down 184 eateries in the United States in 2015, which was 59 more than what they wanted to open.

Starting in 2017, the income was roughly $22.82 billion. The brand estimation of McDonald's is more than $88 billion; outperforming Starbucks with a brand estimation of $43 billion. The total compensation of the organization in 2017 was $5.2 billion; this worth saw an ascent of about 11% from the previous year.

McDonald's is, without a doubt, the quickest developing drive-thru eatery chain on the planet. In 2018, McDonald's developed as the most profitable inexpensive food chain with a brand worth nearing $126.04 billion. Also, the all-out resources of McDonald's were almost $33.8 billion.

The world's quickest developing cheap fast food chain partitions its market into four unique areas: U.S., International Lead Markets, High Growth Markets, and Foundational Markets and Corporate.

According to the report set forth by the organization in the year 2017, the market in the U.S. created the biggest measure of income at $8 billion. The International Leads Markets which includes Australia, Canada, France, Germany, and the U.K. created an income of $7.3 billion.

The High Growth Markets which incorporate China, Italy, Korea, Poland, Russia, Spain, Switzerland, the Netherlands, and comparative brought in about $5.5 billion in revenue.

The Foundational Markets and Corporate incorporate the rest of the business sectors. Furthermore, it additionally incorporates a wide range of corporate exercises. The income created by this section of the market represented roughly $1.9 billion.

McDonald's - Restaurants And Services

In certain nations, "McDrive" areas close to roadways offer no counter administration or seating. interestingly, areas in high-thickness city neighbourhoods frequently preclude pass-through service. There are likewise a couple of areas, found for the most part in the downtown locale, that offer a "Walk-Thru" administration instead of a Drive-Thru.

McCafé is a bistro-style backup to McDonald's cafés and is an idea conceived by McDonald's Australia (likewise known, and promoted, as "Macca's" in Australia), beginning with Melbourne in 1993. As of 2016, most McDonald's outlets in Australia have McCafés situated inside the current McDonald's eatery.

In Tasmania, there are McCafés in each eatery, with the rest of the states rapidly following suit. After moving up to the new McCafé look and feel, some Australian eateries have seen up to a 60% expansion in deals. There were more than 600 McCafés around the world some time back.

Create Your Taste

From 2015–2016, McDonald's attempted another gourmet burger administration and eatery idea dependent on other gourmet cafés, for example, Shake Shack and Grill'd. It was taken off without precedent for Australia in early 2015 and extended to China, Hong Kong, Singapore, Saudi Arabia, and New Zealand with progressing preliminaries in the US showcase.

In committed "Make Your Taste" (CYT) booths, clients could pick all fixings including a kind of bun and meat alongside discretionary additional items. In late 2015, the Australian CYT administration presented CYT servings of mixed greens.

After an individual had requested, McDonald's prompted that hold up times were between 10–15 minutes. At the point when the nourishment was prepared, the prepared group ('has') carried the sustenance to the client's table.

Rather than McDonald's typical cardboard and plastic bundling, CYT nourishment was exhibited on wooden sheets, fries in wire bushels, and servings of mixed greens in china bowls with metal cutlery. A more expensive rate connected. In November 2016, Create Your Taste was supplanted by a "Mark Crafted Recipes" program intended to be increasingly proficient and less expensive.

McDonald's Happy Day

McHappy Day is a yearly occasion at McDonald's during which a portion of the day's deals goes to philanthropy. The collections on this day go to Ronald McDonald House Charities.

In 2007, it was celebrated in 17 nations: Argentina, Australia, Austria, Brazil, Canada, England, Finland, France, Guatemala, Hungary, Ireland, New Zealand, Norway, Sweden, Switzerland, the United States, and Uruguay. As indicated by the Australian McHappy Day site, McHappy Day brought $20.4 million up in 2009. The objective for 2010 was $20.8 million.

McDonald's Monopoly Donation

In 1995, St. Jude Children's Research Hospital got a mysterious letter stamped in Dallas, Texas, containing a $1 million winnings McDonald's Monopoly game piece. McDonald's authorities went to the medical clinic, joined by a delegate from the bookkeeping firm Arthur Andersen, inspected the card under a diamond setter's eyepiece, took care of it with plastic gloves, and checked it as a winner.

Although game guidelines disallowed the exchange of prizes, McDonald's deferred the standard and made the yearly $50,000 annuity instalments for the full 20-year time frame through 2014, even in the wake of discovering that the piece was sent by an individual associated with a theft plan meant to cheat McDonald's.

McRefugees are destitute individuals in Hong Kong, Japan, and China who utilize McDonald's 24-hour cafés as transitory lodging. One out of five of Hong Kong's populace lives underneath the destitution line. The ascent of McRefugees was first archived by picture taker Suraj Katra in 2013.

McDonald's - Future

The reported objective is to source all visitor bundling from inexhaustible, reused, or ensured sources, reuse visitor bundling in 100% of eateries, and overcome framework challenges by 2025.

McDonald's turned into the principal eatery organization on the planet to set an endorsed Science-Based Target to lessen ozone-depleting substance emanations. It also joined the "We Are Still In Leader's Circle", driving activity to relieve environmental change.

McDonald's USA completed five years as the sole worldwide café organization to serve MSC-ensured fish in each U.S. area. It united with Closed Loop Partners to build up a worldwide recyclable and additionally compostable cup arrangement through the NextGen Cup Challenge and Consortium. Official pioneers called for atmosphere activity and offered arrangements at the primary Global Climate Action Summit (GCAS).

McDonald's co-facilitated the "Way to Greenbuild" occasion with Illinois Green Alliance at its new worldwide home office. The structure, a collaboration among Sterling Bay, McDonald's, and Gensler Chicago, got USGBC LEED Platinum accreditation.

McDonald's is establishing the tone for other inexpensive food organizations to pursue. Given the present want by numerous buyers to spend cash on organizations that are doing great on the planet, where McDonald's leads, others will pursue.

Who is the founder of McDonald's?

McDonald's was founded by Richard McDonald and Maurice McDonald on 15 April 1955 in California, United States.

Who is the CEO of Mcdonald's?

Chris Kempczinski is the CEO of Mcdonald's since Nov 2019.

Who is the owner of McDonald's in India?

In India, McDonald's is a joint-venture company managed by two Indians- Amit Jatia (M.D. Hardcastle Restaurants Private Ltd) and Vikram Bakshi ( Connaught Plaza Restaurants Private Ltd).

When was the fast-food chain McDonald's founded?

Mcdonald's was founded in 1940 in San Bernardino, California.

How much does a Mcdonald's franchise owner make?

An average Mcdonald's franchise generates $150,000 annually.

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How McDonald's Became The Benchmark For Fast Food

Table of contents.

The McDonald brothers developed a system to make it all happen. Yet we know them for Ray Kroc, who created one of the world's largest chains of restaurants, real estate and toy retailers, while 'outmaneuvering' the founders. 

Although McDonald's has not been the largest fast-food chain in the world since 2011, it is still the best-known brand. Even in Israel's Negev Desert, 100 kilometers from the nearest city, there is a restaurant, because franchising has given the company such a huge boost worldwide. 

A few key facts about McDonald’s:

• The Kellogg Company was founded in 1940. 
• McDonald’s and its franchise partners employ more than 200,000 people globally.
• McDonald’s reported $8.1 billion in sales by corporate-owned restaurants and $10.7 billion by franchise partners .
• The gross profit in 2020 was $4.7 billion .
• Global comparable sales decreased 7.7% in 2020 , mainly due to the COVID-19 pandemic.
• McDonald’s spent over $100 million on the international markets to boost marketing in hope of recovery. 
• McDonald's operates more than 39,198 restaurants in more than 100 countries around the world .

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You Don’t Sell Burgers! It’s A Real-Estate Business! 

The first burgers.

Richard (Dick) and Maurice (Mac) McDonald opened their first diner together, a hot dog stands in Monrovia, California, in 1937. Later, in 1940, they moved to nearby San Bernardino and opened McDonald's Bar-B-Que. Over time, the eatery became more popular and profitable, but the brothers realized they could cut a lot of costs if they rethought their concept. They developed a series of revolutionary ideas and strategic measures that proved to be closely linked: reducing the range of products, preparing ingredients properly, keeping potatoes warm with an infrared lamp, and building a kitchen where food could be prepared more quickly. They also encourage people to take their orders and target families rather than young people.

In 1948, the McDonald brothers closed a well-established restaurant and reopened it a few months later with a slimmed-down menu - and by then under the McDonald's name. They realized that most of their income came from selling burgers, so they reduced the selection to almost nothing. (To give you the full picture, the fries and milkshakes were replaced with French fries and patties for a short time.)

Effectiveness above all

Kitchen work was sped up by having only two things to bake. Washing up was also kept to a minimum, as the food was served in disposable packaging. In 1952, the restaurant was closed again for several months to remodel the kitchen so that food could be served more quickly and efficiently than before. The new kitchen and associated system allowed all orders to be filled in as little as half a minute. Since the operation was supported by the "fast system," it's not hard to guess where the term "fast food" came from.

McDonald's goal at the time was to get people to store there, but not to eat there, but to take something there. This was achieved not only by the packaging of the products but also by the fact that there was no built-in canteen in the first restaurant; if you did not want to take what you bought home with you, you could either eat your lunch in your car or sit on a bench nearby. For a while, they also experimented with serving drinks in cone-shaped cups that customers could not put down, which encouraged them to eat faster.

Thanks to this incredibly efficient and fast operation, they were able to sell burgers for 15 cents - about half the price of other places. The fast service, consistent quality, and low price amply compensated customers for the inconvenience. Soon, the McDonald brothers wanted to open more restaurants, but they were not nearly as successful as their first location. The reason was simple: they could not be everywhere; they could only be personally responsible for quality assurance at the first restaurant. At the same time, the oldest McDonald's still in operation today opened in Downey, California.

The arrival of Ray Kroc

The brothers realized that they did not necessarily have to open new locations themselves to expand, but that others would do it for them. So in 1948, they began to reform their business model and set up a franchise system. By 1954, they had sold the royalties from 21 franchises. 

1954 marked a turning point in the McDonald brothers' lives. To further speed up service, they ordered a new type of mixer that could ensure the preparation of multiple servings at once. The order put them in contact with Ray Kroc, a travel agent. Kroc was amazed at how efficiently the restaurant operated. He wanted to get into the business and eventually convinced the brothers to make him their franchise representative. From then on, he was in charge of who and where they could open new restaurants.

The new buildings were now built the way the McDonald brothers envisioned their dream restaurant. A clean, red and white exterior with a neon yellow golden arch on either side of the building attracts potential clients (aka bypassers) to the restaurant. The juxtaposition of these two golden arches became the familiar Meki logo, which also forms an "M," a reference to the initials of their name. It took on a similar look to today's image after Ray Kroc became the owner, or rather founder, of the company.

In 1955, Kroc founded the forerunner of today's McDonald's Corporation (McDonald's System, Inc.) and opened its first new restaurant. The first was followed by the second, the third, and within a year, the 18th. Kroc was entitled to 1.9% of gross sales for each of these restaurants, but under his agreement with the brothers, they were entitled to 0.5%. He could barely cover his expenses with the remaining amount. Then he met Harry Sonnenborn, who gave him a new perspective: McDonald's was in fact a huge real estate business.

Turn of events

Sonnenborn encouraged Kroc to buy the land on which he wanted to build restaurants and then lease it to operators. Kroc listened to him and took the biggest step toward owning the entire chain. This way, he received a steady stream of income and did not have to give any of it to the McDonald brothers. The latter, of course, was not happy about this situation. Everything in the restaurants had to continue to be done the way the brothers wanted, although Kroc tried to introduce several innovations. Finally, in 1961, Kroc bought out the brothers for $2.7 million. To raise this sum, he had to take out loans, 14 million of which he was later able to repay.

Years of rapid expansion

As part of the agreement, the brothers would continue to own the restaurant in San Bernardino, but they had to change the name because Kroc already owned the naming rights to McDonald's. So they continued to run the restaurant under the name "The Big M," but Kroc was upset that he could not have it. Soon after, he opened a Meki just around the corner from the M, which allowed the McDonald brothers to close the location in a few years. They probably regretted the deal for life, because, with their 0.5% share at the time, it would have guaranteed them $15 million a year until the late 1970s, while their heirs would have received $305 million in 2012. And Kroc probably got a good deal on that loan.

By 1965, the company was operating more than 700 restaurants. That year, they went public. McDonald's stock started at $22 a share, but within a week the price had risen to $49. By the end of the decade, they had 1,500 restaurants worldwide and has started at Sonnenborn's suggestion, they continued to own the land on which the Meccas operated. Now they are looking for new land with fairly high standards: it should be about 4,600 m2, with the possibility of building on 370 m2, and located on the corner of at least one, but preferably two, busy roads.

Also in 1965, the then very limited offer was expanded: the Filet-O-Fish sandwich was added to the national menu. The fish burger was invented to give Catholic customers a choice during Lent. In 1968, the Big Mac, the iconic double-decker burger, was introduced. The Egg Muffin was introduced in 1975, the Happy Meal in 1979, and Chicken McNuggets in 1983. Of these, the Happy Meal is perhaps the most interesting, as it has made McDonald's one of the largest toy sellers in the world: 1.5 billion toys are sold each year thanks to the Happy Meal.

Ray Kroc never stopped working for McDonald's until he died on January 14, 1984. To this day, McDonald's provides its customers with great-tasting, affordable food, franchisees and crew members with job opportunities, and suppliers with reliable ingredients and products.

Key takeaways

Successful market penetration does not always require a complete upheaval of the rules of the sector. The McDonald brothers did not invent any truly new dishes, but they did let awareness guide the design of their restaurants. So the number-one success factor for McDonald's is professional design and process management.

The second success factor is sales behavior. While other restaurants were slower to offer their products, the excellent policies encouraged employees to sell customers as many extras as possible. Even today, "go big" accounts for a significant portion of restaurant profits (industry rumors say 40%). 

The third approach is the real estate-based approach. The franchising system that Ray Kroc perfected is still used today, and we know from the annual report that the company makes more revenue from franchisees than it can generate itself.

The McDonald’s Products

Core products.

McDonald's core products include burgers, which typically consist of a slice of beef, cheese, and sauce sandwiched between two halves of a bun - in all combinations and sizes. The smallest product is the standard burger, while the largest is the Big Mac. The sandwiches are available with chicken and fish, as well as localized versions in many countries around the world.

Core products include French fries, which also come in a variety of sizes. In addition, the Happy Meal menu specifically for children, as well as shakes and soft drinks, continue to be an integral part of fast food restaurant menus in almost all countries. According to market research , an average McDonald’s menu includes around 145 items. 

Seasonal products

National holidays, Halloween, Christmas, or even Easter - whatever the occasion, McDonald's introduces new seasonal products every month in every country around the world. Some are country- or region-specific (for example, the foie gras sandwiches are made specifically for the European audience), but most products are available in other countries after a limited local testing period. 

Typically, a traditional product, such as a standard burger, is enhanced with additional ingredients (e.g., spices, additional meat, or a special design) to reflect the seasonal event.

Localized products

McDonald’s has achieved this global success through maximizing localization techniques and appealing to local audiences. The company manages the menus to fit culturally and socially accepted norms; tailoring their traditional Big Mac meals to suit a local audience with specific requirements.

• Argentina: McFiesta burgers are available at McDonald's restaurants in Argentina, which are quarter pounders with mayo instead of ketchup. There are typical US sides here like French fries and Coca-Cola. Consider getting ice cream in an Oreo cone for dessert.
• France: Typically, you'd find the McBaguette combo at Mcdonald's in France - a sandwich that is topped with two hash browns and includes breaded chicken, ham, and cheese. The 'Le McWrap' and the 'Le Menu Happy Meal' are also available. Try their apricot and lime macarons for dessert, or their cherry tomatoes as a side dish.
• Hungary: In Hungary, specialized seasonal menus are very common, both in terms of ingredients and appearance. This is also facilitated by the fact that, since 2019, Hungarian McDonald's restaurants have been managed by a centralized, Hungarian-owned company, while the American McDonald's company provides only the brand and franchise rights. Foie gras is a regular item on Hungarian menus, as is "Dotted McFlurry" (a cottage cheese-based ice cream) made in cooperation with a very popular local dairy supplier. ‍
• India: McDonald's has created the Maharaja Mac by substituting chicken patties for the traditional beef patties in its Big Macs. In India, cows are regarded as sacred animals, thus the reasoning behind this change. Indians also enjoy the Vegetable Pizza McPuff, a unique side dish. However, fries and Coca-Cola are just as popular here as they are everywhere else.

• Middle East: Specifically for Middle East dining, Mcdonald's has created the McArabia Pita, which is served with beef or chicken patties (pork is not allowed in the predominantly Muslim diet), onions, and tahini sauce. 
• New Zealand: Despite being removed from the permanent McDonald's menu in New Zealand, the 'Georgie Pie' is still available in some restaurants. With fries and frozen Coke, a square pie topped with steak and cheese is served.
• Sweden: Scandinavian countries tend to favor healthy diets, especially vegetarian food. McDonald's capitalizes on localization with its vegetarian McBean Patty. Served in a bun with lettuce, tomato, and sauce, it has cannellini and kidney beans, onions, green peppers, and carrots.
• Thailand: There is a Samurai Pork Burger on Thailand's national McDonald's menu, which is a pork patty dipped in teriyaki sauce with lettuce, onions, tomato, and mayonnaise. Besides the usual apple pie, you'll also find corn and pineapple pies that aren't available anywhere else.

Partnerships with other companies

• Coca-Cola: The story of McDonald's and Coca-Cola began in 1955 when the fast-food restaurant was looking for a soft drink supplier. The partnership has continued ever since, with Coca-Cola selling not only soda but also other products to the restaurant chain.
• Oreo: Oreo is a worldwide popular dessert brand that mainly produces biscuits. The filled biscuits have become so popular that McDonald's has become a major supplier of Oreo to Mondelez International. In most countries, the biscuit pieces are served with ice cream, but in 2019, McDonald's China team tested the market with a burger with spam and Oreo biscuits . (It was not a global hit.)
• Beyond Meat: The trend toward vegetarian diets is spreading like wildfire around the world, and McDonald's is no stranger to it. According to the BBC , the McPlant burger will be available in British and Irish outlets as early as next year. The beef patty, made with pea protein, is available in 10 restaurants in Coventry, England, in the first round since the end of September, and then throughout the United Kingdom next year. The product's main ingredient is made for McDonald's by Beyond Meat, a publicly-traded startup.
• Local suppliers: Whether we're talking about the US or any other country in the world, one of McDonald's main and most forward-thinking efforts is to source its ingredients from local suppliers. To ensure that the fish, meat, or burger bun is always made to the same standard, McDonald's applies incredibly strict and centralized guidelines. 

Healthy or not healthy?

The restaurant chain has made great strides in the area of healthy eating in recent years: think supply chain with only local suppliers or the introduction of gluten-free, lactose-free, and vegetarian options. The calorie content of a hamburger today is much lower than that of a burger from 1980. In addition, the McDonald's team places great emphasis on healthy living - and they are trying to recruit new colleagues who will promote this corporate image. But that's just one side of the big picture.

A very interesting post came to light in 2008 when Karen Hanrahan revealed a shocking picture. Out of curiosity, she had set aside a McDonald's burger she bought in 1996 to see how quickly it would disintegrate (since there were theories about "plastic" foods in the past). After 12 years, the burger looked exactly like the one she had just bought, except it had shrunk a bit.

Although this is not part of the company's strategy, the following sources have been criticized the company:

• Jamie Oliver and his legal battle against the company
• Super Size Me , a movie in which the protagonist eats only McDonald’s products 
• In 1986, Greenpeace distributed flyers against obesity, naming McDonald’s among the ones responsible.
• There are also a lot of myths (most of them already busted) around the company’s procedures and products.

The product portfolio is the company's strength, so it's no wonder McDonald's is constantly improving and perfecting its recipes. Although the company has yet to build its healthy food image, its fast service and delicious, robust flavors win over millions of customers every month. 

The range includes flagship products available in all restaurants (except were banned for religious or legal reasons). These include traditional burgers, fries, and cola.

The company also diversifies its menu with seasonal and localized items. In the latter category, offerings vary from country to country and region to region, usually in partnership with local businesses and brands.

Franchise System

What is a franchise system.

Franchising has spread throughout the world not as a separate form of business, but as a special kind of business.

Franchising is a form of business based on close cooperation in which the franchisor or the owner of the system sells a complex system that has been carefully designed professionally and commercially in every respect and successfully tested in a market environment. The system is handed over to the franchisee with full training, branding, and ongoing support and supervision. Franchisors operate the franchise system to the specifications of the transferor, in the agreed territory, for a fee, for a fixed period.

McDonald’s Franchise Costs & Requirements

When purchasing an existing restaurant or a new restaurant, an initial down payment of 40% is required. Down payments must be made from non-borrowed personal resources, such as:

• cash on hand
• vested profit sharing
• business or real estate equity

The down payment amount will vary depending on the total cost of the restaurant. McDonald's generally requires $500,000 of non-borrowed personal resources before considering a new franchise partner. With less cash available, most opportunities to participate in the program are limited and depending on the transaction's specifics, financial requirements may be much higher. Additional or multi-restaurant opportunities may be more available to those with additional funds.

Franchise financing

To purchase a McDonald's restaurant, the buyer must pay a down payment of at least 25% cash. It is possible to finance the remainder of the purchase price for a period of up to seven years. Although McDonald's does not offer funding the project, McDonald's Owners/Operators benefit from established relationships with many national lenders.

Franchise - Ongoing Fees

• Service fee: Currently, a service fee of 4.0% of monthly sales is based on the restaurant's sales performance. 
• Rent: Rent that is based on a percentage of sales monthly.

Other costs of setting up a new franchise

Costs usually range from $1,2 million to $2,2 million. Most of the costs are related to the construction of the restaurant, such as building and interior design, but the franchisee also pays for equipment, furniture, and kitchen appliances.

General franchising strategy in 2021

McDonald's restaurants provide quality food and beverages in 119 countries, which are franchised and operated by the company. At year-end 2020, McDonald's will have 39,198 restaurants, of which 36,521 are franchised, or 93 percent.

McDonald's franchise restaurants fall into one of the following categories: conventional franchises, development licenses, and affiliates. Optimal ownership structures for restaurants, trading areas, and markets (countries) depend on a variety of factors, including financial resources and entrepreneurial abilities, as well as legal and regulatory frameworks in key areas such as property ownership and franchising. McDonald's business relationship with independent franchisees is governed by standards and policies, which are of fundamental importance to the company's performance as well as its brand protection.

McDonald's franchise partners are not financial investors, but committed partners who not only put up the capital to open a restaurant, but are also willing to participate in the day-to-day operations and running of the restaurant. They know all the ins and outs of the business, but they also reinforce the McDonald's brand through their involvement in the local community.

The potential partner does not have to have a suitable location, as the location of the restaurants is always determined by the company and handed over to the franchisee.

The Company’s Old/New Strategies

Accelerating the Arches is the Company's new growth strategy for 2020. As the leading global omnichannel restaurant brand, McDonald's Strategy encompasses all aspects of the company's business as well as updated values and new growth pillars that leverage the company's competitive advantage.

Growth Pillars

• Marketing: Investing in new, culturally relevant marketing approaches to effectively communicate the brand's story, food, and purpose. Customers will be provided with more personal services through enhanced digital capabilities. 
• Products: Focusing on serving delicious burgers, chicken, and coffee. Chicken and beef will be the company's primary focus as they represent the largest growth opportunities. McCafe’s brand, experience, value, and quality will be leveraged by the markets to drive long-term growth for McDonald's.
• Digital, Delivery, and Drive-Thru: McDonald's plans to accelerate technology innovation to meet the needs of customers as they interact with the company.
• Digital Experience: Known as "MyMcDonald's", the new digital experience platform will transform the company's digital offerings across drive-thru, takeaway, delivery, curbside pickup, and dine-in options. Through the digital tools available on the platform, customers will receive tailored offers, will be able to enroll in a new loyalty program, and will have the option to order and receive McDonald's food using their preferred channel. 
• Delivery expansion: McDonald's has expanded its delivery service to nearly 30,000 restaurants in the last three years and plans to expand further.
• The increasing importance of Drive-Thru: More than 25,000 restaurants globally have drive-thrus, including nearly 95% of the over 13,000 in the U.S. This channel has gained in importance since the COVID-19 outbreak, and leadership expects that it will play an even greater role as customers demand more flexibility and choice. In the U.S. and International Operated Markets, the vast majority of new restaurants will have a drive-thru. In addition to automated order taking, the Company plans to test a drive-thru express pick-up lane for customers with digital orders and a restaurant concept that offers drive-thru, delivery, and takeaway only for customers to enjoy a faster and more convenient experience.

For decades, McDonald's sales efforts focused on the cash register and drive-thru. One of the strongest elements of this was the introduction of the "Go Large" theme. By sizing and pricing the products, even those who had no real need chose the largest product, believing it to be the best and most appropriate offering. 

Today, in addition to physical sales, digital sales have become a priority. An app developed by the company not only speeds up the ordering process but also offers additional discounts that can further increase the cart value per customer.

With the introduction of home delivery, McDonald's has begun working with several partners including UberEats, FoodPanda, and Wolt. For a long time, these online marketplaces did not offer fast food products like McDonald's, but they have now become serious players in the market. The company's offering is particularly strong when it comes to speed: on average, food is delivered in 15-20 minutes, compared to 50-80 minutes for a traditional restaurant.

There are several cornerstones of the company's marketing strategy that have contributed greatly to McDonald's success:

• The Ronald McDonald figure: An owner of a McDonald's franchise introduced Ronald McDonald in 1967. To appeal to children, franchise partners decided to use a clown icon as an advertising tool. 96% of American children knew the name Ronald McDonald by 1973. Ronald McDonald is the second most recognizable fictional character among US schoolchildren, behind Santa Claus.

• The McDonald’s logo: There's no doubt that McDonald's golden arches are one of the most recognizable logos in the world. It was created in 1940. During the '60s, McDonald's decided to simplify their logo and focus on branding the company. A brilliant move was choosing the golden arches as the logo for the fast-food restaurant. The McDonald's logo looks very much like two golden-brown French fries bent into a letter M, and this is one of the most effective design features of the logo. McDonald’s is advertising one of its most popular menu items without viewers even noticing it.

• “Para PaPa Paaaa… I’m lovin’ it”: McDonald's has been using this jingle for a very long time. McDonald's jingle highlights a positive dining experience. The musical theme makes the diners feel at home during their meals there, as well as conveys how friendly and helpful the staff is.
• Promotion campaigns: Television advertising has become a favorite field for all fast-food restaurants with the proliferation of TVs. To this day, McDonald's is a loyal advertiser on channels aimed at children and their parents. Its campaigns focus on delicious food, fun, natural ingredients, and health. 

The company is one of the biggest innovators in the food industry and is credited with inventing or perfecting the following:

• McDonald's put in place order-taking kiosks in 2015, making it one of the first fast-food chains to do so. A touchscreen machine located near the front of restaurants lets customers place their orders without the need for a cashier.
• The introduction of specialty coffee at McDonald's changed McDonald's from a fast-food restaurant to something more. McDonald's introduced its specialty coffee line in mid-2007.
• The company separated a part of larger restaurants and re-branded it as McCaffes, a place where customers can buy coffee and desserts. Now it competes with Starbucks for coffee-lovers.
• McDonald's was one of the first fast-food chains to organize even the smallest details of its operations in a manual. This manual is still being improved today.

The 2020 growth plan contained nothing new compared to the path taken a year earlier. The key elements were digital customer access, which was a key driver of the company's continued growth during the COVID epidemic.

Sales and marketing go hand in hand at McDonald's: over the past 80-plus years, the techniques used have been perfected, all aimed at getting customers to buy. Advertising builds on this image of cheap and healthy food.

Final Thoughts And Key Takeaways

Growth by the numbers.

McDonald's has seen steady growth since its founding. Because of the relative cheapness of its products, it is a truly crisis-proof company, which even COVID could not bring to its knees - unlike millions of small catering businesses.

The company has emerged from the crisis as a winner, thanks in particular to digital developments, drive-thru, and the spread of home delivery.

Key takeaways from the McDonald’s story:

• Real estate business: The McDonald's business model has evolved from a restaurant to a complex system in a relatively short period, with some revenue coming from franchise fees, some from land leases, and some from food sales. 
• Thoughtful processes: While other restaurants are constantly experimenting with food, McDonald's has focused on improving its production technologies from the beginning. In addition to innovative machinery, internal processes have also been organized to ensure that products reach customers as quickly and consistently as possible.
• Franchise system: Behind the amazingly dynamic growth of McDonald's has been a well-constructed franchise system, the foundations of which were laid by the McDonald brothers, but perfected by Ray Kroc. 
• Core, seasonal and localized products: The main feature of the company's product range is that it is extremely consistent, as we can also get fries and cola in the farthest corners of the world. At the same time, local companies, at their discretion, can launch the menu with seasonal and localized products, enabling them to engage their customers even more.
• Strong marketing: Mcdonald’s has consciously built up the dining experience - regardless of whether we’re eating a hamburger in the car, in a restaurant, or at home. The logo, the iconic clown figure, the company’s theme song, the packaging, the internal design, and many other elements add up to become an unforgettable experience.
• Home delivery: Delivery was the largest innovational step from McDonald’s for decades, and partnering with food delivery startups, like UberEats or Wolt helped the company not only to survive the pandemic but get in shape for rapid growth.

Consumer opinion on McDonald's is certainly divided: some say it's plastic, others say it has grown up to meet consumer expectations. As a publicly-traded company, the owner of the golden arch has no choice but to march forward, pioneering innovation as it has throughout its history. What does the future hold for the company? An even broader product range, a stronger home, and digital experience - and, investors expect, continued revenue growth.

Digital Innovation and Transformation

Mba student perspectives.

• Assignments
• Assignment: Digital Winners during the…

Committing to the Core: How McDonald’s Innovated to Survive (and Thrive) During the COVID-19 Pandemic

During the COVID-19 pandemic, McDonald's emerged as the winner in fast casual through digital innovations along their core competencies for their core consumers.

Though the impact of COVID-19 has been felt across the business community, the fast-casual restaurant industry has faced especially high adversity in the face of rapidly changing consumer behavior caused by the pandemic. According to Crunchtime , US fast-casual same store sales dropped to 56% of pre-pandemic levels by April 2020, with social distancing and restrictions on indoor capacity especially hurting fast-casual restaurants whose business models relied more heavily on larger dine-in crowds than its quick service restaurant (QSR) counterparts. 

And though many fast-casual chains quickly adapted to stay afloat during their industry’s most trying time — one in particular not only adapted to the short-term challenges presented by the pandemic, but positioned itself to emerge as the true winner in the post-pandemic future: McDonald’s . Although the pandemic hit McDonald’s hard and prevented customers from dining in most of their restaurants throughout the year, McDonald’s rose to the occasion and managed to deliver its strongest financial performance of the year in Q420 — announcing that it had recovered 99% of Q419 global same store sales, a tremendous feat. 

So how was McDonald’s able to make such a rapid recovery? In the recent Q420 earnings call , CEO Chris Kempczinski attributed McDonald’s success to its new growth strategy encompassing all aspects of McDonald’s business, “ Accelerating the Arches .” Kempczinski explained that at its core, the “Accelerating the Arches” strategy is about “leveraging our competitive advantages,” providing increased value to its current customers and ensuring their continued loyalty. Tactically, this meant significant investment and innovation in what McDonald’s believed to be their key comparative advantages with their core customers — what McDonald’s calls the “three D’s”: digital, drive-thru, and delivery . 

Going into the pandemic, McDonald’s actually found itself well positioned to build on its prior digital innovations to create a user experience well-suited for the constraints posed by the pandemic. McDonald’s recent technology innovations — including the development of the McDonald’s mobile application, acquisition of personalization technology provider Dynamic Yield , Mobile Order and Pay, and self-order kiosks — together have transformed customer experiences in and around their restaurants, giving customers more ways to securely pay and personalize their orders to meet their needs. Digital sales exceeded $10B, or nearly 20% of systemwide sales, in 2020 across the top six markets. 

Such digital innovations paid off tremendously for McDonald’s drive-thru channel. In the Q320 earnings call , Kempczinski highlighted the strategic opportunity of drive-thru for McDonald’s, noting that “a world with less dine-in and more takeout plays to our significant long-time strength in drive-thru…We have the most drive-thrus. We know how to do it best.” Accordingly, as indoor dining took a plunge during the pandemic, McDonald’s made significant drive-thru technology investments (such as dynamic menu boards — leveraging personalization technology from Dynamic Yield) and operational improvements (such as a staffing overall and dramatically cutting menu items to their “core menu”) to ultimately deliver the value their customers cared most about: speed. These innovations enabled McDonald’s to cut 30 seconds from its drive-thru times on average and move “300 million additional cars” through McDonald’s drive-thrus during the pandemic. Such focus on innovations targeting their core customer enabled McDonald’s to recover sales more quickly than anticipated and become one of the few fast casual restaurants to sustain demand for drive-thru .

Pathways to a Just Digital Future

In addition to drive-thru, enabling delivery perhaps not surprisingly became a significant focus for McDonald’s to provide customers with additional safe channels to order food. Ozan mentioned that delivery has “become a meaningful part of our business” very quickly, scaling up its delivery platform and rapidly expanded the number of restaurants to offer delivery to 28,000 of 41,000 global restaurants. The result — delivery sales have more than tripled. 

By focusing innovation on the company’s comparative advantage, the three D’s, McDonald’s was able to create a faster, easier, and better customer experience — even in the face of tremendous change. By improving the customer experience for their core customers, McDonald’s in turn ensured they maintained loyal customers in the face of adversity and successfully recovered sales in a challenging year for the industry. 

McDonald’s will continue to build on the “Accelerating the Arches” strategy and is well positioned to continue seeing gains in the coming years. Recently, McDonald’s unveiled a series of changes that will change how the company’s restaurants interact with customers for years, designed to integrate digital ordering more fully into the McDonald’s ecosystem, increase loyalty through a new rewards program, expand its advantage on drive-thru ordering and double down on delivery. Lucy Brady, McDonald’s chief digital customer engagement, said that “technology has changed our expectations as consumers,” and Kempczinski further said that “the needs of our customers coming through the pandemic are going to be different than they were coming in…the restaurant experience we offer must change to meet those evolving needs.” McDonald’s continues to demonstrate a unique focus to meet those evolving needs of their core consumers, and expect McDonald’s to emerge a winner in the evolving fast casual industry. 

CrunchTime!. 2021.  Restaurant Chain Industry Sales: Tracking US Recovery . [online] Available at: <https://crunchtime.com/blog/restaurant-industry-sales-tracking-us-recovery> [Accessed 10 February 2021].

Hospitality Technology. 2021.  McDonald’s Sees Sustained Demand for Drive-Thru . [online] Available at: <https://hospitalitytech.com/mcdonalds-sees-sustained-demand-drive-thru> [Accessed 10 February 2021].

Hospitality Technology. 2021.  McDonald’s to Acquire Dynamic Yield . [online] Available at: <https://hospitalitytech.com/mcdonalds-acquire-dynamic-yield> [Accessed 10 February 2021].

McDonald’s, 2021. [online] Corporate.mcdonalds.com. Available at: <https://corporate.mcdonalds.com/content/dam/gwscorp/assets/news-articles/2020/November2020/MCDN-ATA-InfoSheet.pdf> [Accessed 10 February 2021].

Meatpoultry.com. 2021.  McDonald’s doubles down on digital, delivery and drive-thru . [online] Available at: <https://www.meatpoultry.com/articles/24456-mcdonalds-doubles-down-on-digital-delivery-and-drive-thru> [Accessed 10 February 2021].

Restaurant Business. 2021.  Inside McDonald’s digitally-focused future . [online] Available at: <https://www.restaurantbusinessonline.com/financing/inside-mcdonalds-digitally-focused-future> [Accessed 10 February 2021].

Transcribers, M., 2021.  McDonald’s Corp (MCD) Q3 2020 Earnings Call Transcript | The Motley Fool . [online] The Motley Fool. Available at: <https://www.fool.com/earnings/call-transcripts/2020/11/09/mcdonalds-corp-mcd-q3-2020-earnings-call-transcrip/> [Accessed 10 February 2021].

Transcribers, M., 2021.  McDonald’s Corp (MCD) Q4 2020 Earnings Call Transcript | The Motley Fool . [online] The Motley Fool. Available at: <https://www.fool.com/earnings/call-transcripts/2021/01/28/mcdonalds-corp-mcd-q4-2020-earnings-call-transcrip/> [Accessed 10 February 2021].

Student comments on Committing to the Core: How McDonald’s Innovated to Survive (and Thrive) During the COVID-19 Pandemic

Would it be fair to say that the automation McDonald’s was bringing in to deal with demands for a better minimum wage helped it deal with the pandemic better? Also, the “Accelerating the Arches” strategy though profitable for McDonald’s will cause more automation, leading to loss of jobs in the future. This could lead to McDonald’s have a public perception issue in the future which might in turn end up negatively impacting their profits.

Hi Vikram — yes this is a great point. I should note there is tremendous risk with the approach McDonald’s is taking. You’re right that the future they’re proposing would fully automate the drive-thru experience (e.g. AI for taking orders and making the food, building conveyor belts to deliver the food to cars). Further, another risk they are facing has to do with franchisees. Similar to our Domino’s case, McDonald’s will mandate the technology changes and charge additional fees. Franchisees were apparently caught off guard with the Accelerating the Arches announcement. It’ll be interesting to see how they adjust given these challenges.

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Marketing Explainers

Marketing guides, case studies, examples, and inspiration.

McDonald’s Marketing Strategy Explained

McDonald’s transcends mere burgers. It’s a symbol of globalization, serving millions daily across more than120 countries. Its ubiquity reflects the rise of a standardized consumer culture. The golden arches represent familiarity, offering comfort food and predictable service amidst cultural differences. Yet, it adapts! Local menus cater to diverse palates, showcasing its cultural sensitivity. From economic engine to community hub, McDonald’s impact is undeniable, shaping food trends, influencing business models, and even sparking cultural debates. It’s not just fries and shakes; it’s a snapshot of our interconnected world, bite by bite.

Why Marketing is Critical to McDonald’s Success

McDonald’s marketing strategy is like a secret sauce, carefully concocted to maintain its position as the world’s biggest burger chain. Here are some key ingredients:

Building Brand Recognition

The famous Golden Arches are everywhere, and are instantly recognizable, plastered on restaurants worldwide, creating a sense of familiarity and trust. From packaging to uniforms, McDonald’s maintains a consistent brand image, reinforcing its identity across cultures – wherever you are in the world, you can always easily spot a McDonald’s restaurant, and be confident in what kind of food it will serve.

Targeting Families

Appealing to children with Happy Meals, fun toys and characters like Ronald McDonald fosters brand loyalty from a young age. Playgrounds and indoor play areas create a welcoming environment for families, making McDonald’s a go-to destination for parents with kids.

Value and Convenience

McDonald’s offers affordable budget-friendly options, making it accessible to a broad customer base, including young people and families on low-incomes. Drive-thru and online delivery options cater to people busy lifestyles with quick and convenient service – for most people McDonalds represents the ultimate convenience food. McDonald’s is known to be a brand that pioneered the whole concept of fast food. 

Adapting to Local Tastes

McDonald’s tailors its menus to regional preferences, offering items like the McSpicy Paneer in India or the Samurai Pork Burger in Japan. So even though you can get a Big Mac anywhere in the world, you’ll also be able to buy something more in tune with local tastes. Understanding and respecting local customs and traditions fosters a positive brand image in diverse markets. McDonalds is good at becoming a part of local cultures. 

Embracing Technology

The McDonald’s mobile app allows for easy ordering, delivery, and loyalty rewards, enhancing customer experience and engagement, while the brand’s use of social media and targeted online advertising helps it to reach new audiences and stay relevant.

By combining these elements, McDonald’s marketing strategy creates a powerful recipe for success. It builds brand loyalty, attracts new customers, and adapts to changing tastes and technologies, ensuring the golden arches continue to shine brightly in the fast-food landscape.

McDonald’s marketing strategy has also faced criticism for unhealthy food options and targeting children. However, the company has made efforts to address these concerns by introducing healthier menu items and promoting responsible marketing practices.

The company’s marketing strategy is a masterclass in building a global brand that resonates with people of all ages and cultures. It’s a testament to the power of marketing in driving business success.

Beginnings of McDonald’s Marketing Strategy

In the early days, McDonald’s wasn’t the burger behemoth we know today. To grab a foothold in the competitive food scene, it had to get creative with their marketing. 

Introduced in the 1950s, the Speedee Service System streamlined cooking process ensured fast service, appealing to families with hungry kids.McDonald’s was one of the first fast-food chains to add playgrounds, making it a destination for families and fostering brand loyalty among young customers.

Ronald McDonald, the world famous cheerful clown mascot, was introduced in 1963 and became an instant hit with children, further solidifying McDonald’s image as a family-friendly restaurant.

Affordability was always a key part of McDonald’s strategy. Launched in 1983, the Dollar Menu offered a selection of popular items for just $1, making McDonald’s an accessible option for budget-conscious families.

The company has made good use of catchy jingles and slogans in its advertising, for example “I’m Lovin’ It”- This instantly recognizable jingle, introduced in 2003, became a global phenomenon, further boosting brand recognition and positive associations. Also “You Deserve a Break Today” used in the 1970s and 80s, resonated with working families, positioning McDonald’s as a reward and a break from the daily grind.

Community Engagement

McDonald’s actively involved itself in local communities, fostering goodwill and building positive relationships with customers, through activities such as sponsoring local events and sports teams.

Supporting Ronald McDonald House Charities, which provide housing and care for sick children, helped build McDonald’s image as a caring and responsible corporate citizen.

These early marketing strategies laid the foundation for McDonald’s global success, and continue to resonate with customers around the world.

Brand Positioning

McDonald’s brand positioning revolves around being a convenient, family-friendly, and affordable fast-food option. Consistency in branding and messaging is crucial for reinforcing this image across diverse markets. The golden arches, iconic logo, and recognizable color scheme serve as visual anchors, instantly associating the brand with familiarity and reliability worldwide. 

Consistent messaging, whether through slogans like “I’m lovin’ it” or advertising campaigns featuring Ronald McDonald, creates a cohesive brand identity. This consistency cultivates trust, allowing customers to know what to expect regardless of location, fostering loyalty and ensuring McDonald’s remains a top-of-mind choice in the competitive fast-food landscape.

Product Innovation

McDonald’s consistently innovates its menu to cater to evolving consumer preferences and local tastes. Introducing new items like regional specialties or adapting classics to suit local cuisines demonstrates its commitment to embracing diversity. For instance, offering items like the McSpicy Paneer in India or the Teriyaki McBurger in Japan showcases this adaptability.

Moreover, responding to health concerns, McDonald’s has expanded its menu to include healthier options, such as salads, grilled items, and fruit sides. Menu changes, like reducing portion sizes and incorporating nutritional information , align with shifting consumer demands for healthier eating habits.

Continual menu evolution not only reflects responsiveness to health trends but also demonstrates McDonald’s agility in staying relevant and appealing to a wide customer base while respecting regional tastes and dietary preferences.

Audience Segmentation

McDonald’s exemplary target audience segmentation is the cornerstone of its successful marketing campaigns. By understanding and catering to diverse demographics, McDonald’s maximizes its appeal and relevance across different consumer groups. The brand’s ability to resonate with various audiences is evident through its tailored campaigns, each crafted to speak directly to specific demographics.

One standout example is McDonald’s approach to children and families. The inclusion of Happy Meals with toys, colorful play areas, and cheerful advertising featuring beloved characters like Ronald McDonald has made the brand synonymous with family outings. This targeted strategy not only entices children but also appeals to parents seeking a family-friendly dining experience.

In contrast, McDonald’s doesn’t solely focus on families; it also caters to young adults and teenagers. Campaigns often feature trendy music, youth-oriented promotions, and collaborations with pop culture icons. Initiatives like the “McDonald’s All-American Games” or tie-ins with popular movies resonate with this demographic, positioning McDonald’s as a cool and relevant choice.

Campaigns emphasizing fresher ingredients, nutritional information, and the introduction of salads and other healthier options aim to attract individuals seeking balanced food choices. This targeted approach acknowledges the importance of health without alienating its broader customer base.

The brand effectively targets specific regional preferences. In Asian markets, for instance, McDonald’s offers items like the McSpicy Chicken Burger or rice-based dishes, aligning with local tastes. Meanwhile, in European markets, emphasis on coffee offerings and cafe-style ambiance caters to consumers seeking a coffeehouse experience.

By segmenting its audience and crafting tailored campaigns, McDonald’s resonates with diverse demographics, ensuring its messaging speaks directly to each group’s desires and values. This nuanced approach allows the brand to maintain a strong connection with a wide array of consumers, contributing significantly to its global success.

McDonald’s Advertising and Promotion Strategy

McDonald’s advertising strategy has been a masterclass in capturing attention across various mediums, embracing everything from traditional TV and print to modern digital platforms. Their multi-faceted approach ensures a ubiquitous presence that remains top-of-mind for consumers globally.

The company’s TV commercials have been iconic, employing vibrant colors, catchy jingles, and relatable scenarios. From heartwarming family moments to youth-focused narratives, their ads strike emotional chords while showcasing menu items. These commercials often feature happy faces enjoying meals, promoting a sense of community and joy around the brand.

McDonald’s leverages social media platforms exceptionally well to engage with its audience. Engaging campaigns, interactive content, and user-generated campaigns keep the brand relevant and connected. They utilize platforms like Facebook, Twitter, Instagram, and TikTok to share promotions, behind-the-scenes glimpses, and user-generated content, fostering a sense of community and participation.

It also invests in print media and outdoor advertising. Bold and visually appealing designs are used in print ads, showcasing the iconic products alongside limited-time offerings. Outdoor ads, strategically placed in high-traffic areas, reinforce brand visibility and often include playful or mouthwatering imagery to attract attention.

The brand has consistently utilized memorable slogans like “I’m lovin’ it” which has become synonymous with the McDonald’s experience. These slogans resonate across cultures, creating a lasting imprint on consumers’ minds.

Mascots like Ronald McDonald play a pivotal role in the brand’s identity, appealing to children and fostering a friendly, approachable image. Happy Meal toys, tie-ins with movies or events, and seasonal promotions add an element of excitement, creating anticipation and encouraging repeat visits.

McDonald’s runs innovative and attention-grabbing promotions. The “Monopoly” game, McRib limited-time offers, or the “McDonald’s All-Day Breakfast” promotion have been immensely successful, driving sales and creating buzz among customers.

The consistent use of catchy slogans, engaging mascots, and memorable promotions has contributed to McDonald’s maintaining a strong foothold in consumers’ minds. The brand’s ability to adapt these elements to various mediums and cultural contexts has ensured its advertising remains impactful and relevant, leading to enduring success in a competitive market.

McDonald’s Global Strategy

McDonald’s global expansion strategy is a testament to its adaptability and localization while preserving its core brand identity. The brand enters new markets by carefully analyzing cultural nuances and consumer preferences, ensuring a tailored approach for each region.

Franchise partnerships play a pivotal role in McDonald’s expansion. The company often collaborates with local entrepreneurs who possess a deep understanding of the market. This fosters smoother operations and cultural integration while benefiting from local expertise.

Adaptation is key to their global success. McDonald’s doesn’t impose a uniform menu but rather adapts it to suit local tastes. This means offering items like the Maharaja Mac in India or the Teriyaki McBurger in Japan. Such flexibility showcases the brand’s commitment to embracing diversity and catering to regional preferences.

The brand maintains a consistent level of quality and service worldwide. Whether in bustling city centers or remote locations, customers can expect the same standards, fostering trust and reliability. McDonald’s global expansion isn’t just about reaching new territories; it’s about embracing cultural diversity while upholding the essence of what McDonald’s represents globally.

Lesson From McDonald’s Marketing Strategy

McDonald’s marketing approach offers valuable lessons for other businesses:

• Adaptability and Localization: McDonald’s showcases the importance of adapting to local tastes and preferences while maintaining a consistent global brand. Businesses should tailor their products, services, and marketing strategies to resonate with diverse markets.
• Targeted Segmentation: Understanding and catering to various demographics is crucial. McDonald’s success stems from effectively targeting different consumer groups with tailored campaigns. Businesses should identify their audience segments and craft specific messaging to address their unique needs and preferences.
• Consistency in Branding: McDonald’s demonstrates the power of consistent branding across various channels. Businesses benefit from creating a cohesive brand identity with recognizable logos, slogans, and visual elements to enhance brand recall and trust.
• Innovation and Adaptation: The brand’s continual innovation in menu offerings, promotions, and technology integration highlights the importance of staying relevant. Businesses should continuously evolve, introducing new products/services, embracing technological advancements, and responding to changing consumer trends.
• Global Expansion Strategy: McDonald’s expansion strategy emphasizes collaboration with local partners, understanding cultural nuances, and adapting to regional preferences. Other businesses can learn to navigate global markets by embracing local expertise and respecting cultural diversity.
• Community Engagement and Social Responsibility: McDonald’s engagement in social responsibility initiatives has contributed to its positive brand image. Businesses should prioritize community involvement, sustainability, and ethical practices to build trust and goodwill among customers.

McDonald’s marketing strategy isn’t just about burgers and fries; it’s a finely tuned recipe of familiarity, convenience, adaptation, and emotional connection, all sprinkled with a dash of technology.

McDonalds marketing strategy: Inspiring Findings from a Case Study

• Published on 23 Feb 2023

Table of Contents

Introduction to mcdonald’s, about mcdonald’s, mcdonald’s marketing strategy – the 5ps, mcdonald’s challenges.

The History of McDonald’s growth was something more than what had been expected. From being just a drive-through restaurant to earning college credits from Hamburger University, they’ve had a great journey, not just as a food service but as a great competing business in the market as well. And the market competition that its competitors face is no exception.

Right after World War II, there were a lot of businesses introduced to keep up with the economy for survival. This is where most of the food-serving business came into the picture. With the increase in services, there was also an increase in market competition.

Case studies were conducted to thoroughly examine the causes of such difficulties in order to adequately explore how to solve them for businesses. They strive to identify a solution to the issue after conducting a thorough examination.

Here is another Sprintzeal article that will introduce you to some of McDonald’s successes from their business case studies. This is a compilation of the top five inspiring McDonald's solutions gleaned from the case study on McDonald's marketing and service.

The McDonald brothers, Maurice ("Mac") and Richard, established the first McDonald's restaurant in San Bernardino, California, in 1940. At first, it operated as a drive-in with a limited food menu. This made it easier to provide a high-quality service while also being quick and efficient.

This limited menu included a 15-cent hamburger, a few varieties of shakes, and fries. This helped the McDonald brothers operate their speed service system effectively and introduce it to other places by franchising it. To adapt to mass expansion and engage more customers, they continued to add new varieties of shakes and burgers.

In 1955, Ray Kroc opens the first franchised McDonald's in Des Plaines, Illinois as its franchising. The first advertisement for MacDonald’s was done in the 1960s as a first mode of promotion for the business.

20 years into the business, McDonald’s brothers began to face heavy competition within the same business and service. Yet again, for being a quick-service restaurant, they had to face a lot of direct competition. Most of its competition came from Taco Bell, Subway, Burger King, and KFC. Here is how McDonald's tackled its competitors to become a worldwide success.

Since the competition in the field was heavy, every business began to come up with their own unique strategy to compete with one another. Direct competition's harsh reality is that it must be met with new, similar, and relevant products. Another unavoidable fact is that you must attract customers away from your competitors while also providing satisfactory service.

" To grow under such competition is to make a way out, to reach out to the world..." And so they did. Here are some of the findings that contributed to McDonald’s worldwide success. The 5Ps marketing strategy allowed them to reach a wide audience. The 5Ps are five important factors to consider: place, product, price, people, and promotion.

One of McDonald’s primary objectives is to ensure that the product fulfills every customer’s demand and also to maintain the same bond over the long term. McDonald's cherishes its customers, which is why they adapt their services to suit customer preferences and lifestyles. They value building long-term relationships with their clients and customers.

The following are some inspiring findings for McDonald’s worldwide succession:

McDonald’s marketing strategy – Place

McDonald's franchised locations are one of the best strategies they have implemented for the best results. They majorly target people of young ages, like college students and family, since almost every McDonald's outlet is a fun place to visit and to play at. With this, McDonald’s customer count grew due to its loyalty to its customers.

After a small survey, it was noticed that, on average, an adult is spending about 7+ USD for a single meal. This was because the outlets are easily accessible, but more than just being accessible, it was because the pricing was very reasonable and affordable.

McDonald’s marketing strategy – Pricing

The strategic planning done with pricing based on the customer’s profile can be called a masterplan. Another masterpiece was making it as affordable as possible while also not making it super cheap, which would cause them to run loose.

As the customer’s profile said, it was seen that the majority of people using the service were college adults and family members. This forced them to rethink their franchise placement. It was also discovered that the buyers for the chain were both men and women who frequently worked for low to average pay. This data allowed McDonald’s to precisely strategize their pricing for their service in the most appropriate way.

McDonald’s marketing strategy – Product

As previously stated, McDonald's was founded in 1940 in San Bernardino, California, with a very limited menu in order to provide quality service while also being quick. They had to make some changes to their products as franchising grew in order to maintain that loyal bond with their customers.

Initially, McDonald’s was known for their burgers, which were made of pork and beef. Due to religious reasons, customers felt uncomfortable with all other products. With this, there was a gradual decrease in the number of customers. Hence, to bring the customer count up and satisfy customers' demands, McDonald’s then began to work on burgers with chicken and fish as an alternative.

Customers stayed loyal to the brand, and McDonald’s paid them in exchange by giving first priority to customer satisfaction.

McDonald’s marketing strategy – Promotion

The companies’ promotion strategies are yet another well-designed master strategy. Utilizing multiple forms of promotion, they had the chance to reach more new customers and stay engaged with their existing loyal customers.

Promotional communication methods such as billboard advertising, contests, broadcasts, coupons, and other emotionally connecting marketing contents make a good impression on customers and also aid as a step towards brand awareness. When the topic is about advertising and promotion, being presentable plays a key role.

McDonald’s marketing strategy – People

Due to the mass marketing done by McDonald's, they generate a large number of customers. McDonald's always conducts primary research on its customers, utilizing the massive customer profiles now available to clearly understand the demands and satisfy them in the required manner.

As it all boils down to one sole reason, the main objective of McDonald's marketing and advertising is to make people aware of its brand, its products, and its services. To get more details and questions from the customers, they perform surveys and questionnaires at stores. They use this data to help them build a better brand by meeting the needs of their customers. 

Referred article: A CASE STUDY ON MCDONALD’S MARKETING STRATEGIES

One of the most challenging things faced by McDonald's was bringing their menu to India while franchising. Because the majority of the Indian population is lacto-vegetarian and eats meat, they needed to find alternatives for beef and pork, as well as for religious reasons.

McDonald's prioritized their customers' demands and accepted the challenge. With this, the burger filling was replaced with a potato base, naming it the McAloo Tikki for the Indian vegetarian customers. And, as read from one of the blogs read on the internet, written by the McDonalds Company, they say “ McAloo Tikki burger is a balanced meal, with recommended amount of protein, fat, and carbohydrates.”

In addition to the Indian menu with alternatives like chicken and fish was made for the Indian non-vegetarian customers.

McDonald's even decided to separate vegetarian and non-vegetarian cooking methods in order to provide a completely vegetarian experience. 

McDonald's always prioritizes its customers' comfort and demands. This allows them to stay loyal to their customers, allowing a huge number of families to feel comfortable with the brand at the restaurants.

By opting to make use of multiple marketing communication methods, McDonald's makes its way to the top over all other fast food businesses. Marketing strategies not only help businesses grow with respect to revenue but also help spread awareness to wide audiences.

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McDonald's Corporation

• Format: Print
• | Pages: 22

About The Author

Joshua D. Margolis

Related work.

• October 2002 (Revised June 2005)
• Faculty Research

McDonald's Corporation (Abridged)

• McDonald's Corporation (Abridged)  

McDonald's Marketing Strategy: How McDonald's makes you love it!

Learn about mcdonald's iconic marketing strategy and advertising campaigns. read how mcdonald's aces the 4ps of marketing mix - product, price, promotion & placement..

• overview#goto" data-overview-topic-param="brief">Brief history
• overview#goto" data-overview-topic-param="believes">What McDonald's believes in
• overview#goto" data-overview-topic-param="present">McDonald's as a company today
• overview#goto" data-overview-topic-param="strategy">McDonald's Marketing Strategy?
• overview#goto" data-overview-topic-param="iconic">Iconic Marketing Campaigns
• overview#goto" data-overview-topic-param="burgers">Thinking beyond burgers
• overview#goto" data-overview-topic-param="hungry">How McDonald's makes you hungry?
• overview#goto" data-overview-topic-param="model">Franchise business model
• overview#goto" data-overview-topic-param="key">Key Takeaways

McDonald's is one of the world's most popular and successful fast-food restaurants worldwide. The company has a long and storied history, where its business model is widely studied and imitated.

In this case study, we will take a closer look at McDonald’s marketing strategy that is set to help them maintain a 34.3% market share by 2026.

A brief history of McDonald's brothers

Source - McDonald's Corporation

McDonald brothers Richard and Maurice McDonald found the fast food chain in 1940. 

The brothers originally operated a hot dog stand but eventually transitioned to a hamburger stand.

They developed a new and innovative business model that relied on standardized procedures, assembly-line production, and low prices. Their Speedee Service System included a 15 cents hamburgers, fries and shakes of limited menu.

In 1954, Ray Kroc became involved with McDonald’s as a franchise agent. He was so impressed with the McDonald brothers’ fast food company that he convinced them to let him expand the chain nationally.

He envisioned scaling McDonald's food with 1000+ fast food restaurants across the US alone. Ray Kroc played a crucial role in developing McDonald's business strategy to achieve this feat and beyond. He recognized the importance of creating a strong brand identity , and he made sure that McDonald's focuses on quality, convenience, and value.

The famous Golden Arches

The McDonald brothers were particular about the basic idea of its architectural design too. McDonald's invested to ensure its fast food restaurant was catchy across the driveway with its Red and White Mansard Roof design, also known as their famous Golden Arches.

The above image shows early blueprints of McDonald’s signature Red and White golden arches with a road sign. Today these golden arches contribute to uniquely positioning their brand in the fast food industry.

What McDonald's believes in

McDonald's corporation mission statement is -

T o make delicious feel-good moments easy for everyone .

This indicates a strong focus on being a global and accessible brand in the food and beverages industry.

McDonald’s corporate vision is -

To move with velocity to drive profitable growth and become an even better McDonald’s serving more customers delicious food each day around the world.

This indicates a focus on profits and growth, but in a way that makes them a better version of themselves. This is evident as McDonald's is known to constantly innovate by entering new markets and experiment with products.

The present day McDonald's as a company

McDonald's success is widely studied for its guerilla marketing tricks, bundle pricing strategy and business model. The company has weathered many storms over the years, including the recent global pandemic, which forced most of its restaurants to close.

At present, it faces issues with the Russian invasion of Ukraine, as covered by Trung Phan's substack issue , yet enjoys an increase in overall sales as stated prior in the case study.

An analysis of McDonald’s marketing plan and business strategy reveals that the brand is incredibly successful.

But what about its pricing strategy for profits? 

Today, McDonald's is also extremely profitable, with its latest Q3 2022 earnings revealing a 9.5% increase in sales. Also, it enjoys a recession-proof revenue stream.

McDonald's is the world's largest restaurant chain by revenue serving over 69 million customers daily in over 100 countries in more than 40,000 outlets as of 2021. - Wikipedia

So, what makes McDonald’s business model and marketing strategies successful? 

There are several factors at play, but the key among them is how McDonald's focuses on product innovation and customer satisfaction. With this, McDonald’s is able to curate its services for its global target audience.

Let us understand their marketing mix deeper by highlighting its marketing strategies.

What is McDonald's Marketing Strategy?

McDonald’s brand positioning strategies have shaped McDonald’s to make it an approachable brand across age groups. Their digital marketing mix is designed to appeal to their target market which is looking for affordable fast food.

Product focus areas

McDonald's primarily sells food products like delicious burgers, cheeseburgers, chicken products, french fries, breakfast items, soft drinks, milkshakes, and desserts. In response to changing consumer tastes, McDonald's has expanded its menu items to include salads, wraps, smoothies, and coffee. Its new restaurants across international markets also adapt to local food products to suit customer demands.

Let us learn more about its key marketing mix strategies across price, placement, product and promotion in the following sections.

1. McDonald’s Promotion

McDonald's leads in the fast food industry with its promotional techniques that include offers and freebies to regularly attract customers. 

For example, McDonald's offers a "Happy Meal," which consists of a main meal, side, and drink for a discounted price. They have successfully fostered brand loyalty through their McDonald's Rewards program which allows 26 million customers to earn redeemable points for free.

Its marketing plan primarily includes advertising, public relations, online ads, and direct marketing. They also utilize point-of-sale materials and sponsorships to promote its brand.

Source - McDonald's Company Blog

2. McDonald’s Product

McDonald's product offerings include fast food items such as burgers, fries, soft drinks, milkshakes, and breakfast items. This includes some iconic menu items like Big Mac, French Fries, Christmas-themed McFlurry, Chicken McNuggets, etc. A key to McDonald's success is how it is consistent in terms of taste and quality, no matter which location you visit worldwide.

You can watch this interesting documentary on how McDonald's 'manufactures' consistent French Fries across the globe:

3. McDonald’s Pricing Strategies

McDonald’s marketing objectives include appealing to the price point of a target market that is looking for fast food service at low costs. This consists of families with children, middle-class income earners and anyone who needs less wait time for food.

Ray Kroc focused on adopting bundle price strategy, like, the Big Mac Meal, that becomes profitable when sold in bulk at low prices. This leads to an impressive 37% profit margins , which is much higher than 6-9% average QSR margins.

Today, it also focuses on self-serve kiosks and meal-based menu items to further reduce labour costs. Their pricing also follows purchase power parity to adapt to the international market segment.

For example, in India, McDonald's finally became profitable after 22 years by focusing on local tastes and spending habits of their target audience.

4. McDonald’s Placement

McDonald’s has a global presence in over 100+ countries. Their marketing strategy involves strategically placing restaurants in high-traffic locations near schools, shopping centres, and major highways. It was one of the first fast-food chains to introduce drive-thru service in 1975. 

This basic idea at the time allowed McDonald's to tap into a new market – busy people who wanted to eat on the go. Today, their drive thrust is one of the fastest in the world with a 5.11 minutes record.

They also grabbed market share by localising their menu to the customer demands in that country. This enables them to tap into local marketing channels and create unique experience for foreign travellers from their otherwise monotonous consistency.

Iconic Marketing Campaigns by McDonald's

McDonald’s marketing campaign don't just include Ronald McDonald or frequent discounts. Their marketing mix is includes iconic marketing strategies, partnerships, and aligning to target market demands that are today their competitive advantage.

Let's explore some of the most innovative tactics from McDonald's marketing mix -

McDonald’s Cobranding Strategy to Double Down its Reputation & Cut on the Advertising Cost

McDonald's has had a long and successful history of partnering with other brands to create mutually beneficial relationships. One of the most iconic examples, that is also its competitive advantage, is McDonald's partnership with Coca-Cola.

Here, McDonald's sells Coke products in its restaurants, while Coke promotes McDonald's products in its advertising. Thus, both are promoting each other to their customer bases.

This partnership began in 1955, just a year after McDonald's was founded, and continues to this day. 

Partnership with other brands and creators that complement their fast service

McDonald's has partnered with other companies in various industries, including children's toy manufacturers for their happy meal offer, movie franchises, fashion designers, and even delivery brands like Uber Eats.

Such partnerships allow them to run exclusive products and a multi-brand experience that is complimentary in nature.

For example, McDonald's has partnered with Nike to create a line of McDonald's-branded athletic shoes.

Riding pop culture wave as marketing strategy with McInfluencers

McDonald's marketing plan includes working with pop stars and influencers to keep itself relevant with the times.

For example, Rapper Travis Scott partnered with McDonald's for an exclusive line of shoes and Travis Scott meal. A similar partnership was done with Michael jordan called McJordan which was a huge hit.

Running marketing campaign like these helps them align their brand value with the celebrity's fan base.

Showing up in movies as a marketing strategy

Just like Apple, McDonald's too uses the marketing strategy to makes movie cameos. It has sponsored many movies where their branding is carried out via product placements and featuring the golden arches.

These include The Sleeper (1973), All the President's Men (1976), Mac and Me (1988), The Flintstones (1994), Pulp Fiction (1994), The Pink Panther (2006), 13 Hours (2016), etc.

McDonald's has many documentaries made on their manufacturing processes. This includes McDonald brother and Ray Kroc founding story, with The Founder being a well-celebrated movie. The 1985 Santa Claus The Movie and McDonald's commercial is also a memorable example.

Mcdonald's Green Marketing Strategies: Initiatives for making healthy food and a Sustainable Future 

Recently, the company plans to use reusable packaging to reduce paper and plastic waste that the fast food industry is notorious for.

The McDonald’s brand has set a goal to be completely carbon Neutral by 2025. They are also working with suppliers to source more sustainable ingredients and packaging.

Such green marketing strategy measures appeal to the present generation that is eco-conscious. Reducing its own carbon footprint helps the company achieve an alignment with SDG goals.

Ronald McDonald and McDonaldland as competitive advantage

Did you know McDonald's has its own cinematic universe?

Ronald McDonald is an iconic character that represents McDonald's brand. They have built a fictional world too called McDonaldland that features other characters like the Hamburglar, Mayor McCheese, Birdie, Grimace, the Fry Kids and the Early Bird.

Clicking photos in the famous McDonald's bench with Ronald McDonald is a childhood memory that makes McDonald's a favourite fast foods joint. These characters have movies made too as a part of McDonald's marketing plan.

Very few fast food joint are able to match the brand value created by McDonald's Corporation with mascot-like marketing strategy.

Dissing competitor brands as marketing strategy

It's very difficult to make pricing strategy as a competitive advantage in low priced fast food industry. So such brand have to compete with each other with massive marketing budget spends, that includes - outwitting each other too!

Many people enjoy thesee public advertising rants across billboards, commercials and even tweets. McDonald's vs Burger King or 'The Burger Wars' is a well-known brand battle covered by marketing nerds and international journal for businesses worldwide.

Such tricks help both brands benefit across their target markets, give audience exposure and reduce ad spends. It makes them more recognisable and earn media attention.

McDonalds marketing strategy with jingles

McDonald's marketing by using mass media to promote its products made it even more popular in the 1960s. The famous “I’m Lovin’ It" jingle was introduced in 2003, which has helped keep the McDonald's brand top-of-mind as the favourite fast food joint for millions of consumers worldwide.

This includes a song by the same name by Justin Timberlake credited to Tortora, Batoy, Pharrell Williams and Heye creative director Andreas Forberger:

The Hamburger University as a means for excellent customer satisfaction

McDonald's takes its customer service seriously. The company believes in training their high potential employees across managers, franchise owners and executives to ensure a consistent and pleasant customer service worldwide.

Here, they team leadership principles, pricing strategy, identifying competitive advantages with respect to placement, how to improve sales volume and other business strategies.

Thinking beyond burgers by venturing into new markets

McDonald's went ahead from burgers to further increase their target market segments with its famous breakfast menu and McCafe brand. The McEgg meal and McMuffin food proudcts are very popular worldwide.

Its pricing strategy fits the consumers who are looking for quick bite as they move for their work or school.

McCafe has proven to be an affordable alternative to expensive Starbucks coffee. The menu items are bundled such that it complements well with the breakfast menu.

How McDonald's marketing strategy makes you hungry?

The Red and Yellow colors were not randomly selected by the brand. These colors play a very important role in making you feel hungry!

Red color makes you feel an impulse and a sense of urgency. While yellow is comforting, yet energetic enough to take action.

Also, the red ketchup and mustard dips which are usually used along with fast food products also align with these colors.

Such color psychology tricks along with the scent of fries make you immediately hungry when you enter any McDonald's restaurant. These colors are also distinctly visible and bright during night time.

Why the franchise business model works for McDonald's

Opening new restaurants to rapidly scale was possible thanks to McDonald's franchise model. Running a franchise model isn't easy. But a strong focus on consistency and branding has made McDonald's a must read business strategy case study.

It's successful mainly due to below reasons -

McDonald's is a real estate company

McDonald’s owns most of its restaurant properties, which gives it greater control over costs and profits. This also allows McDonald’s to generate income from franchising and rent, which account for a significant proportion of its revenue.

It owns $28.4 billion worth of buildings and lands across the world!

Scale with Efficiency and Repetition

The company’s restaurants are designed for quick service and high throughput, which helps to keep costs down. McDonald's also benefits from having a relatively simple, limited menu that can be easily replicated across its thousands of restaurants worldwide.

McDonald’s Unique Refinancing Strategies During Recession

During the recession, all the banks offer loans at the lowest interest rates so that they continue to buy, and the economy recovers soon. 

McDonald's used this strategy in 2019 to their advantage and opened many global outlets. 

Refinancing helps it pay off old debts (taken at higher interest rates before the recession) from certain banks and pay them off by taking loans from other banks during the recession when the interest rates are lower.

Thus, the company makes a profit by purchasing its own shares and selling them shares again when the market recovers. 

Moreover, the surplus capital is used to acquire more franchises with its global outlets by refinancing. 

Key Takeaways from McDonald's for entrepreneurs

If you're an entrepreneur looking to venture into fast food industry, here are some major takeaways from McDonald's business and marketing strategy -

Less is more

Focus on key products and deliver them well. Do not offer too much and compromise on quality.

Build systems and processes

Focus on building systems that can work consistently and develop SOPs around them to scale.

Larger target market means more marketing budget

If you are targeting EVERYONE - be ready to finance the necessary marketing strategy to acquire customers.

Be adaptable

Figure out a way to adapt to changing customer demands, while still maintaining your core values. McDonald's is a clear example of how one can innovate with consistency.

Adpot a Bundle Pricing strategy

Study McDonald's bundle pricing strategy to club complimentary products together and offer discounts on them to increase sales.

Enjoyed reading this marketing strategy case study?

Check out  Netflix marketing strategy to know how you can make a sticky product and gain competitive advantage in red ocean target markets.

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McDonald’s Five Forces Analysis (Porter’s Model) & Recommendations

This Five Forces analysis of McDonald’s Corporation examines the external factors in the industry environment influencing the company’s strategies for international business expansion and growth. Michael E. Porter’s Five Forces analysis model provides valuable information to support strategic management, especially in addressing competitive issues in the external environment of the food-service business. These issues are based on factors external to McDonald’s, representing the degree of competitive rivalry in the industry, the bargaining power of customers or buyers, the bargaining power of suppliers, the threat of substitutes, and the threat of new entrants. In this Five Forces analysis of McDonald’s, the five forces are mainly in the fast-food restaurant industry, although the company also sells McCafé coffee products for home use and other consumer goods. As the leading restaurant chain business in the world, the company is an example of effective strategic management, especially in dealing with competition in different markets worldwide. This status shows that McDonald’s operations management and strategic direction are appropriate to the external factors identified in this Five Forces analysis.

In addressing the external factors determined in this Five Forces analysis, McDonald’s Corporation ensures that its strategies are appropriate to combat external forces. The company faces pressure from various competitors, including large multinational businesses and small local restaurants. Considering the context of this Five Forces analysis, McDonald’s generic competitive strategy and intensive growth strategies satisfy business goals in competing with Burger King , Wendy’s , Subway, and Dunkin’, as well as other food-service businesses that compete with McCafé, such as Starbucks Coffee Company .

Summary: Porter’s Five Forces Analysis of McDonald’s

In this Five Forces analysis, McDonald’s faces the effects of external factors at varying intensities, based on the variations among markets around the world. For example, the U.S. fast-food market presents a competitive landscape different from that of the European fast-food market. The restaurant chain company implements strategies to meet these external factors and minimize their negative impacts. Considering the combination of market conditions, this Five Forces analysis of McDonald’s establishes the following intensities of the five forces:

• Strong competitive rivalry or competition
• Strong bargaining power of buyers or customers
• Weak bargaining power of suppliers
• Strong threat of substitutes or substitution
• Moderate threat of new entrants or new entry

Recommendations . This Five Forces analysis shows that McDonald’s Corporation needs to prioritize the strategic issues related to competition, consumers, and substitutes, all of which exert a strong force on the company and its external environment. The other forces (bargaining power of suppliers and threat of new entrants) are also significant to the food-service business, although to a lesser extent. In this regard, a recommendation is to strengthen the business by building on the competitive advantages and strengths enumerated in the SWOT analysis of McDonald’s Corporation . This Five Forces analysis also indicates that the fast-food company’s managers must focus on reducing the effects of competitors and substitutes on revenues and market share.  McDonald’s marketing mix (4Ps) partly supports efforts for mitigating the effects of competition. Also, it is recommended that McDonald’s make its product innovation process more aggressive. Although the food-service market is saturated, new menu items can attract more customers to the company. Furthermore, based on this Five Forces analysis, McDonald’s can implement higher quality standards to address the forces of competition and substitution.

Competitive Rivalry or Competition with McDonald’s (Strong Force)

McDonald’s experiences tough competition because the fast-food restaurant market is saturated. This element of Porter’s Five Forces analysis model considers the effects of competing firms in the food-service industry environment. In McDonald’s case, the strong force of competitive rivalry is based on the following external factors:

• High number of food-service firms – Strong Force
• High aggressiveness of firms – Strong Force
• Low switching costs between restaurants – Strong Force

The industry has many firms of various sizes, such as global chains, like McDonald’s, and local mom-and-pop fast-food restaurants. This external factor strengthens the force of competitive rivalry in the fast-food restaurant industry. Also, the Five Forces analysis model considers company aggressiveness a factor that influences competition with McDonald’s. In this business case, most medium and large firms aggressively market their food and beverage products. In this context of the Five Forces analysis, such an external factor increases the intensity of competitive rivalry with McDonald’s Corporation. In addition, low switching costs are an external factor that makes it easy for consumers to transfer to other restaurants, such as Wendy’s and Burger King, thereby adding to the force of competition. Thus, this element of the Five Forces analysis of McDonald’s shows that competition is among the most significant external forces for consideration in the strategic management of the business.

Bargaining Power of McDonald’s Customers/Buyers (Strong Force)

McDonald’s marketing strategies address the power of customers in influencing business performance. This element of the Five Forces analysis deals with the leverage of consumers, and how their decisions impact food-service businesses. In McDonald’s case, the following are the external factors that contribute to the strong bargaining power of buyers:

• Low switching costs – Strong Force
• Large number of food and beverage providers – Strong Force
• High availability of substitutes – Strong Force

The ease of changing from one restaurant to another (low switching costs) enables consumers to easily influence McDonald’s business performance. In the Five Forces analysis framework, this external factor strengthens the bargaining power of customers relative to the influence of food-service firms on the market. Low switching costs are also linked to the ease of finding online information for comparing food-service providers and alternatives. Moreover, because of market saturation, diners can choose from many fast-food restaurants other than McDonald’s. In this Five Forces analysis, such a condition makes the bargaining power of buyers a strong force that affects competition and the fast-food company’s external environment. Furthermore, the availability of food and beverage substitutes is relevant in this external analysis, adding to customers’ bargaining power over McDonald’s. For example, substitutes include food kiosks and outlets, artisanal bakeries, microwave meals, and foods that consumers can cook at home. Based on this element of Porter’s Five Forces analysis, business strategies must increase customer loyalty to address the identified external factors in combination with sociocultural trends, like consumers’ increasing preference for healthy lifestyles, outlined in the PESTEL/PESTLE analysis of McDonald’s Corporation .

Bargaining Power of McDonald’s Suppliers (Weak Force)

Suppliers influence McDonald’s in terms of the company’s production capacity based on the availability of materials. This element of the Five Forces analysis model shows the impact of suppliers on firms and the fast-food restaurant industry environment. In McDonald’s case, the weak bargaining power of suppliers is based on the following external factors:

• Large number of suppliers – Weak Force
• Low forward vertical integration of suppliers – Weak Force
• High overall supply for food-service businesses – Weak Force

The large population of suppliers weakens the effect of individual suppliers on McDonald’s Corporation. In the context of this Five Forces analysis, such a weakness is partly based on the lack of strong regional and global alliances among food and beverage suppliers. Also, most of McDonald’s suppliers are not vertically integrated. This means that they do not control the distribution network that transports their products to fast-food restaurant firms. In Porter’s Five Forces analysis model, low vertical integration weakens the bargaining power of suppliers over McDonald’s Corporation. Moreover, the relative abundance of ingredients, like flour and meat, reduces individual suppliers’ influence on the company. Thus, this element of the Five Forces analysis shows that external factors combine to make supplier power weak and a minor issue in the restaurant company’s strategic management. Still, McDonald’s stakeholder management and strategy for CSR, ESG, sustainability, and corporate citizenship help in addressing this force coming from suppliers.

Threat of Substitutes or Substitution (Strong Force)

Substitutes are a significant concern for McDonald’s Corporation. This element of Porter’s Five Forces analysis model deals with the potential effects of substitutes on the growth of the restaurant chain business. The following external factors make the threat of substitution a strong force against McDonald’s:

• High substitute availability – Strong Force
• Low switching costs for consumers – Strong Force
• Low cost to performance ratio of many substitutes – Strong Force

There are many substitutes for McDonald’s food and drinks, such as products from artisanal food producers and local bakeries. Also, consumers can cook their own food at home. In the Five Forces analysis model, this external factor contributes to the strength of the competitive threat of substitution in the fast-food industry. In addition, it is easy to shift from McDonald’s to substitutes because of the low switching costs. For example, shifting from the company’s hamburger meals to substitute meals typically involves insignificant or minimal disadvantages, such as additional time consumption for food preparation, or slightly higher costs per meal in some cases. Moreover, this Five Forces analysis of McDonald’s highlights the fact that many substitutes are competitive in terms of quality and customer satisfaction with affordable prices (low cost to performance ratio), and consumers’ satisfaction with the health benefits of home-cooked meals. In this element of the Five Forces analysis of McDonald’s Corporation, external factors make substitutes a major strategic issue that requires competitive approaches, like product quality improvement. Such approaches need to be included in the company’s current efforts to encourage people to eat in fast-food restaurants instead of resorting to substitutes. Such efforts are evident in the business goals based on McDonald’s mission statement and vision statement .

Threat of New Entrants or New Entry (Moderate Force)

New entrants can impact McDonald’s market share and financial performance. This element of the Five Forces analysis refers to the effects of new players on restaurant businesses. In McDonald’s case, the moderate threat of new entry is based on the following external factors:

• High variability of capital costs – Moderate Force
• High cost of brand development for food-service companies – Weak Force

The low switching costs allow consumers to easily move from McDonald’s toward new fast-food restaurant companies. In Porter’s Five Forces analysis model, this external factor strengthens the competitive threat of new entrants against existing players in the food-service industry. Also, the high variability of capital costs in establishing a new restaurant business only partially limits the entry of new businesses into the market. This external factor leads to the moderate threat of new entry against McDonald’s. However, a major consideration in this context of the Five Forces analysis is that it is costly to build a strong brand in the fast-food industry. Many small and medium-sized businesses lack the resources to create a strong brand that rivals McDonald’s brand. Thus, the external factors in this element of the Five Forces analysis of McDonald’s show that the competitive threat of new entrants is moderately considerable but not the most important strategic issue for the multinational restaurant chain business.

• Daradkeh, F. M., Hassan, T. H., Palei, T., Helal, M. Y., Mabrouk, S., Saleh, M. I., … & Elshawarbi, N. N. (2023). Enhancing digital presence for maximizing customer value in fast-food restaurants. Sustainability, 15 (7), 5690.
• Mackenbach, J. D., Widener, M. J., van der Gaag, E., & Pinho, M. G. (2023). Survey-derived activity space-based exposures to fast food outlets and their cross-sectional associations with use of fast food outlets, diet quality and BMI. Health & Place, 79 , 102966.
• Martinez-Contreras, R. M., Hernandez-Mora, N. C., Vargas-Leguizamon, Y. R., & Borja-Barrera, S. M. (2022). Pestel Analysis and the Porter’s Five Forces: An Integrated Model of Strategic Sectors. In Handbook of Research on Organizational Sustainability in Turbulent Economies (pp. 292-314). IGI Global.
• McDonald’s Corporation – Form 10-K .
• McDonald’s Corporation – Food Quality & Sourcing .
• McDonald’s Corporation – Our Growth Pillars .
• McDonald’s Corporation’s Website .
• U.S. Department of Agriculture – Economic Research Service – Food Service Industry Market Segments .
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McDonald’s Branding Strategy and Marketing Case Study

Analysis and examples of mcdonald’s identity, positioning, key messages, tone of voice, brand archetypes, customer benefits, competitors, and marketing content..

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Brand Overview

• Food Service

Business Type

Physical Products

https://www.mcdonalds.com

Target Customer

Classic Fast Food Consumers

Primary Need ( Job To Be Done )

Eat the same fast comfort food I’ve had my whole life

Brand Visual Identity & Content

Primary brand colors, brand typefaces, hero content.

Hero Content Type

Content features people, brand messaging, key messages, benefit or feature focus, tone of voice, brand archetypes.

( Learn More About Brand Archetypes )

Everyperson

Brand Positioning Strategy ( Elements of Value )

( Learn More About The Elements of Value )

Aspirational

Affiliation / Belonging

Sensory Appeal

Reduces Cost

Brand Benefits

Get nearly the exact same meal from any location around the world

Eat and share the same meals that I’ve had my entire life

Save money on a quick meal that fills me up

Competition

Key competitors.

Burger King , Wendy’s, Jack In The Box, Carl’s Jr., Chipotle , Arby’s, KFC, In-N-Out, Five Guys, The Habit, Taco Bell , Subway

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Strategic-Management-Case-McDonalds

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McDonald’s Corporation Case Study Analysis

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Overview of the Case

Definition of the problem, alternative solutions, selected solution to the problem, expected results and rationale for the solution, positive and negative results.

McDonald’s, the first food chain known for its strong performance in a very competitive industry is facing stiff competition from other firms. The firm’s breakfast offerings are not as competitive as they were before due to strong performance by products from other market players such as Taco Bell, White Castle, Dunkin Brands Group, Burger King and Starbucks.

These firms have new breakfast products which have been received well by consumers in different areas they are operating in. As a result, these firms’ improved performance in the industry has negatively affected McDonald’s market share (Jargon, 2014, p. 1).

McDonald’s poor competitive position can be seen through its declining sales and profit revenues in the past six months. This paper is going to discuss the main marketing issues that McDonald’s faces in its operations and how they can be improved to help the firm regain its competitive position in the industry.

McDonald’s weakening position in the industry is due to its failure to come up with effective marketing strategies that respond to the needs of young consumers. In the past, the firm’s breakfast offerings performed well in the market but it has been losing customers gradually to new firms.

Low innovation in the firm has made it difficult for the firm to attract new consumers who are willing to try out the product it sells in the market (Jargon, 2014, p. 2).

The firm has also failed to come with an effective product development strategy to help it sell new high quality products that satisfy consumers’ expectations. As a result, this has affected the company’s competitive position in the market because it has failed to keep up with modern market trends that are crucial for its long term performance.

The firm also needs to improve the relationships it has with its franchisees. They feel that the firm’s marketing strategies are not effective and fresh ideas are needed to help the firm regain its footing in the industry. In addition, they insist that more needs to be done to improve the quality of the firm’s operations in the industry.

The main actors that need to be analyzed are: McDonald’s, its competitors and franchisees. McDonald’s has not been able to come up with important strategic changes to help it maintain its market share in the industry. Other fast food firms have developed efficient market processes that are responsive to current consumer trends in the market.

Therefore, McDonald’s competitors have been able to institute higher operational standards that position them well in the industry (Jargon, 2104, p. 3). The firm has also been unable to develop beneficial partnerships with its franchisees. They feel that it needs to come up with innovative promotional strategies to attract new customers to sample its products.

McDonald’s faces various problems such as: a weakening brand, low sales, ineffective promotions and the inability to keep up with its competitors. The main problem the firm needs to address to solve all these issues is its marketing mix functions. The company needs to review the four P’s of the marketing mix which are: products, prices, promotions and place.

This will help the firm to improve the value of its internal systems of operations to help it attain high standards of performance in the long run (Bradley, 2010, p. 75).

In addition, the firm needs to understand issues related to the quality of service it offers that need to be improved to help it attain its objectives in the industry. This approach will help the firm to focus on priorities to regain its market share in the industry to help it register good performance in the long run.

Product improvements and developments are a crucial part of any marketing strategy. McDonald’s needs to carry out research to find out specific types products that customers prefer to consume for breakfast. This approach will enable the firm to stay in touch with its customers to anticipate their needs and expectations by providing products that satisfy them.

At the moment, the firm has failed to create appropriate menus that attract customers to make them more willing to try out its product offerings (Bradley, 2010, p. 79).

The pricing of products should be maintained at current levels to make customers have positive perceptions about the quality of products they are purchasing. This requires the firm to develop effective customer relationship management systems that increase the value of its products in the market.

Promotional aspects of operations need an overhaul to enable the firm to regain its competitive position in the market. The firm needs to rethink its strategy of offering customers give away products because this is likely to increase its costs of operations in the long run.

The current strategy of offering give away products has caused disagreements between the firm and its franchisees, a situation that is likely to have a negative effect on the firm’s operations in the long run.

In addition, the firm needs to look at the internal atmosphere in its outlets to find out if it is suitable for consumer’s eating patterns (Rue & Byars, 2003, p. 43). It may be compelled to redesign its restaurants to enable them to offer a memorable service experience to customers.

The firm needs to carry out market research to find out new products which can be introduced to improve its performance in the industry. The firm needs to test some of its product concepts in some franchises to find out how they are likely to be received by customers. This approach will enable the firm to evaluate how they are likely to perform in the firm in the long run.

The main benefit the firm will get out of this strategy is that it will be able to create new revenue streams for its operations and this will help to increase its profits in the industry.

The firm will also be in a position to establish relationships with new customers to make them more interested in consuming its products (Rue & Byars, 2003, p. 49). However, the main disadvantage associated with such a strategy is that the firm may end up experiencing losses especially if the new products do not appeal to customers’ interest effectively.

The firm needs to improve the quality of service it offers to its customers. It needs to come up with new ways of engaging with its customers to make them understand the benefits they can get from its services.

The firm needs to rely more on innovative technology solutions to market its offerings and attract young consumers in the industry. As a result, this will enable the firm to understand new market trends and how they affect its long term operations in the industry (Panda, 2008, p. 37).

The benefit of this approach is that the firm will be in a position to satisfy the needs of its customers because it will sell appropriate products that conform to specific market conditions. The disadvantage the firm is likely to experience from this approach is that it may take a long period of time before it yields positive results.

Another solution the firm needs to use is to change its promotional strategies. The firm needs to engage with people in their communities to make them have positive perception towards its operations. It needs to go out and conduct promotions in schools, colleges and other places to encourage young people to try out some of its breakfast products (Panda, 2008, p. 43).

This approach is likely to yield positive results in the long run because the firm will be able to understand how to elicit positive consumer sentiments that favor its products in the market.

The advantage of changing its promotional strategy will enable the firm to attract new consumer segments that are willing to sample its products. On the other hand, the main disadvantage associated with this strategy is that it may increase the costs incurred by the firm in its operations.

New product concepts will enable the firm to regain the market share it has lost to its competitors. The firm should consider using popular accompaniments with its products to make them more appealing to customers. As a result, this will help the firm to increase the value of its brand in the market to take advantage of new opportunities which exist.

In addition, the firm needs to develop new menus that attract consumers to make them more interested in various products that are on offer.

Customers should be given more consideration when new product concepts are developed to enable them to satisfy their needs and expectations (Salisbury, 2014). This approach will help the firm to increase the value of its brand in the industry making it well prepared to capitalize on various opportunities that exist.

The firm needs to differentiate services offered to customers who consume breakfast in its outlets. It needs to come up with new ways of appealing to their lifestyles. Moreover, the firm needs to find out conditions that exist in its restaurants to find out if they satisfy the high standards it has set for itself in its operations.

Customers’ perceptions towards a particular product are influenced by the quality of service they get whenever they consume it. Therefore, the firm needs to come up with ways of ensuring that its customers have positive experiences whenever they visit its outlets to consume breakfast (Salisbury, 2014).

This entails retraining its employees to ensure they offer prompt and high quality services to customers in different outlets. As a result, the firm needs to empower its employees to make them more willing to satisfy customers who visit its restaurants.

The firm needs to rebrand its breakfast service offerings to differentiate them from other products that are sold during the day. This approach will help the firm to direct customers’ attention to new quality improvements in its operations that make it stand out in the market. As a result, this will improve customers’ perceptions towards the firm’s products because they will feel that they connect with them on a personal level.

The firm needs to use focus strategies to increase the value of its important products in the market. In addition, the firm needs to redefine specific customer segments it will target with its new breakfast products. This will enable the firm to find out specific methods it can use to attract them. Consequently, the firm will be in a position to turn around its operations to by increasing its profit revenues (Vrontis & Pavlou, 2008, p. 299).

There has been an increase in the number of customers who are interested in consuming healthy diets that have low sugar and fat content. The firm needs to engage young people and make them aware about healthy diets it is going to offer for breakfast as part of its menu. As a result, the firm will be in a position to diversify its product offerings to enable it to attract new customer segments in the industry.

In the long term, this will help the firm to increase various sources of incomes for its operations to increase its competitive edge in the industry. Many people are conscious about what they eat due to the high increase in lifestyle diseases which are mainly caused by poor eating habits revenues (Vrontis & Pavlou, 2008, p. 301).

Therefore, this approach will help the firm to demonstrate that it takes seriously the health and wellbeing of its customers and as a result, it will be in a position to turn around its operations.

McDonald’s new product development strategy will help it take advantage of future opportunities in the industry. This will allow the firm to appeal to younger consumers to make them more loyal. As a result, the firm will be in a better position to grow its revenues to overcome the challenges it has been facing in the industry.

The firm’s business model will focus more on adapting to market conditions to increase its competitive advantage in the long run. As a result, this will enable the firm to use efficient methods to respond to external market conditions that have caused it to lose its market share to competitors (Marder, 1997, p. 47).

For a long time, the firm has focused more on standardizing processes in different markets where its operations are based. However, this strategy will enable the firm to be more flexible in its operations to enable it to achieve higher levels of service excellence in the industry.

An effective product development strategy will enable the firm to improve quality perceptions that are associated with its products in the market. As a result, the firm will be in a position to increase the value of its brand in the industry by ensuring that its operations focus more on customer service excellence.

More importantly, the firm will be able to institute learning processes that enable its staff to acquire new skills to make them satisfy customers’ needs and expectations (Marder, 1997, p. 52). This will increase revenues obtained by the firm from its operations in the industry. In addition, this will help the firm to share information with its franchisees regarding specific improvements that need to be made.

The rationale for this solution is due to the fact that the firm is losing its competitive edge in the industry. Therefore, this requires the firm to make its external and internal processes more innovative so that it can be well prepared to satisfy the needs of its customers in different markets. In addition, the firm’s current strategy has the potential of causing conflicts with its franchisees who are important stakeholders.

As a result, this solution will enable the firm to improve the relationships it has with its stakeholders to ensure that they understand the importance of its new strategies.

The firm needs to review the manner in which it conducts its operations by coming up with new ways of engaging young consumers (Kotler & Armstrong, 2007, p. 72). As a result, this will enable the firm to develop strong and reliable relationships with them and this will help it attain good long term performance in the long run.

The firm needs to implement effective brand management strategies to safeguard the product life cycle of their current and potential new products in the market. This approach will enable the firm to find out how to regulate the growth of its new products in the market to maintain high levels of interest from consumers.

The firm needs to be careful about fads that are driven by high levels of customer excitement which do not last for a long period of time. Therefore, the new product development processes must be guided by information obtained from the targeted customer segments in the market (Kotler & Armstrong, 2007, p. 75). This will to find out how its new products are likely to fare in the market in the long run.

Therefore, the firm needs to rely on forecasting tools to predict expected changes in consumer behavior that are likely to impact on the performance of new products which are sold in the market.

The firm also needs to be careful about becoming complacent in the industry after it starts to register good results from its operations. The firm should institute learning processes that make all employees and other key stakeholders aware about constant trends in the industry that have an impact on its operations.

As a result, this approach will help the firm to focus its attention on organizational priorities that affect the manner in which it performs its functions in the industry. Therefore, this will help the firm to come up with proactive solutions to various challenges it is likely to face in the industry in the long run (Kotler & Armstrong, 2007, p. 82).

Moreover, it is important for the firm to adopt risk management strategies to protect it against situations that are directly caused by poor financial performance. This will increase the stability of its operations in the industry in the long run.

McDonald’s needs to take urgent measures to protect its market share in the industry. The firm needs to develop new products that can satisfy the needs of its customers in the industry. In addition, the firm should come up with new service improvements to help its clients obtain high quality services from its operations. This approach will improve the firm’s advantage over its competitors in the industry.

Bradley, N. (2010). Marketing research: Tools and techniques. New York, NY: Oxford University Press.

Jargon, J. (2014, Apr. 20). McDonald’s faces sharper competition in breakfast battleground. The Wall Street Journal.

Kotler, P., & Armstrong, G. (2007). Principles of marketing. Upper Saddle River, NJ: Pearson.

Marder, E. (1997). The laws of choice: Predicting customer behavior . New York, NY: Simon and Schuster.

Panda, T.K. (2008). Marketing management. New Delhi, India: Excel Books

Rue, L. & Byars, L. (2003). Management: Skills and applications. New York, NY: McGraw Hill.

Salisbury, P. (2014, Feb 20). The globalization of “fast food”. Behind the brand: McDonald’s. Global Research. Retrieved from https://www.globalresearch.ca/the-globalization-of-fast-food-behind-the-brand-mcdonald-s/25309

Vrontis, D., & Pavlou, P. (2008). The external environment and its effect on strategic marketing planning: A case study for McDonald’s. J. International Business and Entrepreneurship Development, 3 (3/4), 289-307.

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Business Strategy McDonalds

Business Strategy enhance the message that McDonald’s is value driven on behalf of its customers by emphasizing their profitable value-meal combinations provide exceptional customer care by exceeding customer expectations, including finding ways to add personal touches that go beyond convenient locations, quick service, clean restaurants and quality products remain an efficient producer while maintaining quality by looking to innovations in food processing, construction and design operations that will increase global profits McDonald’s founding principles

Quality, Service, Cleanliness & Value ( Q.

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S. C. &V. ) Longevity in various community projects like education, healthcare, medical research and rehabilitation. Environmental Concern in General Environmental concerns have become important in recent years, with the wider impact of doing business increasingly recognized by consumers as a factor in their buyer behavior. Ways to minimize the environmental impact of their operations.

Many businesses are the impact of their positive effect of a attitude is that it may prefer to purchase products. Cooking for ways to lower energy consumption. The responsible environmental attract new customers who more ethically derived Environmental Concern for McDonald’s Faced criticism for its environmental policies especially for Polystyrene Clamshell containers in the late asses Protest by Citizen Clearinghouse Hazardous waste (CHEW) during 1987 Protest by school children under group “Kids Against Polystyrene” in 1989 Praise for its competitor, Burger King for taking suitable initiatives on environmental issues.

Why is the environment strategy important to McDonald’s 0 Being leading brand globally, it is rather greater social responsibility of any organization to be accountable for environment 0 McDonald’s founding principles and strategic priorities towards being a value driven company 0 Several stage wise protests by Citizens Clearing House for Hazardous Waste namely “Ronald Mac Toxic Campaign” and “Mockup’ 0 Protest by the important customers like school children under group called ” Kids Against Polystyrene”. Praise for competitor “Berger King” for better environmental initiatives stunt US Regulations on the issues of Environmental Regulations 0 To safeguard own business interest as huge UAPITA investment and sales turnover 0 To be accountable to the public who are also existing customers and mode for revenue generation 0 To protect the environment for future 0 To establish the belief that business leaders must also be environmental leaders 0 Accountability towards stakeholder In what way McDonald’s incorporated an environmental strategy in its operation 0 Joining hands with Environmental Defense Fund (EDP) to resolve issues related to disposal of solid 0 Creation to task force consists of experts from EDP, McDonald’s and Packaging purchaser 0 Making policy for taking lifestyle approach to educing and managing solid waste up to great extent.

Educating customers about the company’s environmental activities and positions 0 Preparation of Environmental policy and delegating authority to Environmental Affairs Officer for enforcing adherence to standards. 0 Adopting collaborative approach by including suppliers and organizing annual environmental conference intended to train suppliers along with reviews and evaluations. 0 Developing following initiatives for protecting the environment: 0 Source Reduction-An initiative to reduce the weight and quantity of materials being used for snacking and responsible for solid waste generation at source level itself 0 Reuse-Thrust on using such materials in behind the counters ( where 80% waste are generated) which can be reused.

Recycling- Using packaging materials which may be recycled easily and should adhere the regulations set by largest user of recycled paper in US Composition-selecting packing materials ( mainly paper packaging) in such a way that the same along with food organics could be composed. Accomplishments Redesign of Cold cup Reduced large Cold cup Reduced density of breakfast leads Reduced density of slain Machine package Reduce density of Small Clamshell Smaller Napkin Oriented unwrapped bulk cutlery Convert to Jumbo roll toilet tissue Reduce gauge of Sundae Cup % Weight Reduction 10.

20% 6. 00% 14. 50% 6. 60% 8. 50% 23% Reduced breakfast sandwich foam with Sandwich Wrap Increased corrugated usage for 10:1 Meat Boxes Replace Sandwich foam with Wrap (I)weight (ii)Volume Down sized Mac D. L.

Package 59% 1% 32% an environment strategy by McDonald’s Being a leader in own business is not necessarily the leader of other field also, hence partnership with competent person/ organization is needed Environmental issues are concern for every member of society hence it should be responsibility of all concerned to actively participate in it. It was need of the time to take help from the expertise in the field of environmental protection. Preparation of Joint Task Force with EDP, educating customers and collaborating with suppliers is example of partnership in dealing with environmental issues and implementation of environmental strategy. Taking feedbacks, ideas from expertise and involving all stakeholders may be better idea to implement environment strategy. Thank You

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Home » Management Case Studies » Case Study of McDonalds: Strategy Formulation in a Declining Business

Case Study of McDonalds: Strategy Formulation in a Declining Business

McDonald’s Corporation or rather the CEO, Mr. Greenberg realized there was a major problem arising within their corporation when their earnings declined in the late 1990s till the early 2000s. Their net income not only shrunk to 17%, but also suffered from slow sales growth below the industry average during that period of time. Although their market share was well above their competitors such as Burger King and Wendy’s nevertheless there was a slow share growth.

Therefore the question of what caused the Big Mac Attack is raised. It is observed that there was a growing trend of customers moving to non hamburger meals which is being offered by indirect competitors such as KFC , Subway (dominating the market with more than 13,200 US outlets) and Pizza Hut as an alternative choice. Sandwiches and a variety of microwaveable meals are being offered at supermarkets, convenience stores and even at petrol stations. This convenience has caused many patrons to switch away from the fast food outlet.

Besides that, there seems to be an increasing trend in fast casual dining which has affected sales for McDonald’s. Patrons are now more willing to spend extra for the traditional fast serving but with a better and classy ambience. Due to this ‘phenomenon’, the growth for fast casual segments grew from 15 to 20% compared to only 2% growth from fast food chains. Taco Bell for instance had an outstanding 19% increases in their profit which proves that higher priced outlets are still in demand.

McDonald’s is also facing a stiff competition among the hamburger eateries such as Wendy’s and Burger King. These major competitors are catching up fast by recognizing the importance of drive-through customers. In order to rope in the 65% of sales which is derived from drive-through delivery, these competitors are enhancing their preparation methods as well as the facility and speeding up their delivery process. Innovative approaches such as windshield responders that automatically bill customers are being introduced, to achieve the estimated 10% efficiency increase in drive-through which brings in an average sale by $54,000. Besides upgrading the drive-through services, these competitors have also understood the market preferences and have taken the risk as hamburgers outlets to offer new product lines ranging from healthy salads to chicken based products prepared in a healthy manner.

Furthermore, the eating trend among the youth and the older generations has undergone significant changes. Many patrons are becoming more health conscious and tend to be picky in determining their daily consumptions. This group of people has also expressed their dissatisfaction on the quality of food which is being served by both McDonald’s and Burger King. It is an obvious fact that burgers served soaking with fat and oil is bound not only to affect patron’s health but their conscience as well. Besides health reasons, many Americans’ eating habits have changed towards the concept of eating out. Recession during that era has taken a heavy toll on many citizens causing them to be thrifty and have returned to home cooked meal instead.

Upon analyzing the causes to the problem, it is noted that these problem are vital to be addressed in order to sustain the life span of McDonald’s. The decline of sales within McDonald’s in USA can lead to a chain reaction and in the long run and cause declines in the group’s worldwide annual sales and growth. Once the root cause has been identified, McDonald’s will be able to re-strategies and develop new and innovative product line, promotions , facilities and even to venture into new market segments. In order to re-capture the lost patron segments, the need to shed the cheap and greasy image with a revamped store design may arise. However the drawback of this is when additional cost may be incurred in order to compensate the eating trends.

Questions to Discuss:

• How are customer’s tastes changing? What Impact these changes have on McDonald’s?
• How well these changes reflected in the industry’s competitive strategies?
• Mcdonald’s future with its current strengths and weaknesses ?
• Does McDonald’s require separate strategies for its heavy user?
• What the ceo should do to grow sales, profit and market share at Mcdonald’s?

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One thought on “ Case Study of McDonalds: Strategy Formulation in a Declining Business ”

Mc Donald’s should start serving healthy meals. And must decrease the price of the product!! If the rates are nominal then anyone will like to prefer MCD , otherwise they are having another option’s to satisfy there need’s. The MCD should label the product in such a maner that anyone can understand it and may able to take stuff’s as per there need. McDonald’s should keep the guiders to help the people while choosing the meal. If they won’t do the changes as the earliest then might be they can be suffering more in loss then now. Now, also customer would like to prefer MCD but few stuff’s aren’t available at every Branch so they used to prefer some other stuff’s from another fast food center’s.

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Strategy Execution for Public Leadership

Implement a public leadership approach for long-term success..

Join Harvard Kennedy School faculty and former Pentagon Chief of Staff Eric Rosenbach to learn how to develop strategies for public leadership success.

What You'll Learn

How do you execute a strategic initiative that has a long-lasting impact? Do you know how to effectively communicate your strategic approach, gathering input and support from key stakeholders? How will you anticipate and respond to scrutiny from shareholders, news media, and the public?

Leaders in government, non-profit, and education organizations face unique challenges when it comes to making strategic, business-oriented decisions. If not thoroughly planned and executed, these decisions have real consequences with high-stakes outcomes. What can we learn from world leaders and experts who have faced these monumental decisions? How can you build a high performing team to successfully execute strategic ideas?

In Strategy Execution for Public Leadership, former United States Pentagon Chief of Staff and Assistant Secretary of Defense for Homeland Defense and Global Security Eric Rosenbach will lead you through real-life public sector challenges, showing you how a purpose-driven strategy execution framework can lead to long-term adoption and success.

This government and nonprofit leadership training online course offers the opportunity to study decisions of key public leaders, like Former United States Secretary of Defense Ash Carter, so you can better understand how to develop strategies that not only align with your organizational goals, but also gain insight into the challenges and scrutiny that come along with making public decisions. Too often, public strategies fail because leaders don’t think about execution, which is made up of leadership and management tools, as well as a team who anticipates all scenarios prior to putting your plan into place. 

Through global case studies and protagonist examples, you will explore topics that set you on a path to strengthen your public leadership skills, including leadership and team development, resource and budget planning, talent recruitment and retention, strategic communications and crisis management, and risk planning and mitigation tactics.

By the end of this leadership development course, you will not only have the tools to create a sound public strategy, but also know how to test and optimize your strategy, increase competitive advantage, and sustain long-term impact and success.

Strategy is not one-size-fits-all. Implement a public leadership approach for long-term success.

The course will be delivered via  HBS Online’s course platform  and immerse learners in real-world examples from experts at industry-leading organizations. By the end of the course, participants will be able to:

• Enhance your strategic thinking by understanding the core elements of public leadership, management, strategy, and execution
• Develop the skills to institute strategic models that align with your goals and your stakeholders
• Prepare to lead your organization to long-term success through a shared understanding of strategic direction
• Create a culture of consistency, both internally and externally, that considers core objectives, resources, and environmental factors  
• Know how to approach strategy both effectively and efficiently, incorporating feedback cycles and creating public value
• Identify weaknesses and risks, developing the skills and planning to respond in a crisis
• Develop strategic communications to effectively roll out new initiatives and anticipate shareholder and media feedback

Your Instructor

Eric Rosenbach is a Senior Lecturer in Public Policy and is the Director of the Defense, Emerging Technology, and Strategy Program at the Belfer Center for Science and International Affairs. Rosenbach teaches graduate courses in policy development, strategy execution, and national security.  As Pentagon Chief of Staff from 2015–2017, Rosenbach led and managed the execution of dozens of high-profile strategic initiatives for the largest public sector organization in the world.  As Assistant Secretary of Defense, Rosenbach was responsible for developing and executing the strategy for all aspects of the Department’s cyber activities and other key areas of defense policy. In the private sector, he led the cybersecurity practice of a global management consulting firm, advising the executives of Fortune 500 companies on strategic risk mitigation strategies.

Real World Case Studies

Affiliations are listed for identification purposes only.

Leadership is a valuable skill that can be cultivated and strengthened.  Hear from the Executive Director of The American Civil Liberties Union of Texas to discover what it takes to become an effective leader at any level.

Communication errors are often cited as the primary reason that initiatives fail. Learn the best strategies for effective communications and media relations from a former United States Secretary of Defense.

Juliette Kayyem

Risk prevention and mitigation is everyone’s responsibility. Explore how to assess and mitigate risks by learning about international events, including the Ebola Endemic, BP Oil Spill, and more.

Available Discounts and Benefits for Groups and Individuals

Experience Harvard Online by utilizing our wide variety of discount programs for individuals and groups. 

Past participant discounts.

Learners who have enrolled in at least one qualifying Harvard Online program hosted on the HBS Online platform are eligible to receive a 30% discount on this course, regardless of completion or certificate status in the first purchased program. Past Participant Discounts are automatically applied to the Program Fee upon time of payment.  Learn more here .

Learners who have earned a verified certificate for a HarvardX course hosted on the  edX platform  are eligible to receive a 30% discount on this course using a discount code. Discounts are not available after you've submitted payment, so if you think you are eligible for a discount on a registration, please check your email for a code or contact us .

Nonprofit, Government, Military, and Education Discounts

For this course we offer a 30% discount for learners who work in the nonprofit, government, military, or education fields. 

Eligibility is determined by a prospective learner’s email address, ending in .org, .gov, .mil, or .edu. Interested learners can apply below for the discount and, if eligible, will receive a promo code to enter when completing payment information to enroll in a Harvard Online program. Click here to apply for these discounts.

Gather your team to experience Strategy Execution for Public Leadership and other Harvard Online courses to enjoy the benefits of learning together: 

• Single invoicing for groups of 10 or more
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Learn more and enroll your team ! 

Who Will Benefit

Public Sector Leaders

Local, state, and national government leaders will benefit by better understanding the core principles of public sector strategy formulation and execution.

Government Administrators

Military, defense, local, state, and federal officials, learn the the business fundamentals of strategy, including competitive analysis, stakeholder identification, and feedback.

Rising Managers

Focused on rising leaders who will benefit from understanding how public sector strategy and execution serves a unique purpose, and can serve as the eyes and ears on the ground to enhance adoption and strategy optimization.

Learner Experience

“My goal for taking the course was to better understand public program decision making. The course was thoughtfully developed and gave me the opportunity to better understand the public leadership perspective. I would recommend this course to individuals wanting a career in public leadership.”

Rob Arnold Executive Director Health Commons Project

Syllabus and Upcoming Calendars

This public leadership training course will help executives, managers, and rising managers in the nonprofit, government, and education sectors develop and implement actionable plans and strategies that will have a lasting impact on their organizations and communities they serve. 

Online Course requirements: There are no prerequisites needed to take this online course. In order to earn a Certificate of Completion from Harvard Online, participants must thoughtfully complete all 8 modules, including satisfactory completion of the associated quizzes, by stated deadlines.

Download Full Syllabus

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• Prepare for this strategy execution training course for public sector leaders and rising leaders
• Understand why strategy execution is important in the public sector
• Overview of the course
• Study a case on Women in the U.S. Military
• Formulate an effective strategy to tackle any problem or opportunity and achieve your intended goals
• Learn how to use environmental scan tools like SWOT and PESTEL
• Study a case on the German Refugee Crisis
• Plan and manage your initiative’s operations to increase performance and productivity
• Learn to generate an activity list using a Work Breakdown Structure (WBS)
• Study a case on healthcare.gov
• Assess and use financial and technological tools to responsibly manage resources and maintain public trust
• Practice generating cost estimate, calculating burn rates, and comparing waterfall and agile methodologies
• Study a case on Equitable Transportation for Houston
• Learn how to strengthen your leadership skills by understanding the styles and traits of an effective leader
• Identify leadership styles and reflect on your own
• Revisit the case study on Women in the U.S. Military
• Communicate your ideas purposefully and persuasively to garner necessary support and commitment
• Learn communications strategies that align with your audience and purpose and compare the uses and roles of different communication channels
• Study the case on the Ebola Endemic in Liberia
• Assess risks and craft ways to mitigate them so that they do not derail your efforts
• Assess risks using an Impact-Probability Matrix
• Learn to match mitigation strategies to risks to create a contingency plan
• Evaluate your initiative to understand your level of impact and how to improve in the future
• Identify key aspects of the Logical Framework planning tool and learn to compare the Logical Framework planning tool to a Performance Management Plan

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Enroll today in Harvard Online's Strategy Execution for Public Leadership course.

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Credential of Leadership, Impact, and Management in Business (CLIMB)

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Digital Marketing Strategy

Key concepts, who will benefit, marketing professionals, non-marketing professionals, entrepreneurs.

What You Earn

Certificate of Completion

Boost your resume with a Certificate of Completion from HBS Online

Earn by: completing this course

Marketing in the Digital Era

• DTC Brands: Fad or Disruption?
• DTC Brands: Innovations and Challenges, Part I
• DTC Brands: Innovations and Challenges, Part II
• Incumbent Responses

Featured Exercises

Crafting a digital marketing plan.

• Setting Objectives
• Defining Target Audience
• Determining Value Proposition
• Identifying Metrics

Acquiring Customers, Part 1: Paid Media

• The Challenges of Reaching and Acquiring Customers Online
• Search Advertising
• Display Advertising
• Utilizing Paid Media Channels
• Measuring Paid Media

Acquiring Customers, Part II: Owned and Earned Media

• Owned Media
• Earned Media
• Influencer Marketing

Engaging Customers

• Personalization
• From Storytelling to Story-Making
• Connecting Customers and Building Community

Allocating Budget and Measuring Success

• Budget Allocation
• Customer Lifetime Value
• Adobe Simulation
• The Future of Marketing

How to Formulate a Successful Business Strategy

Our difference, about the professor.

Sunil Gupta Digital Marketing Strategy

Dates & eligibility.

No current course offerings for this selection.

All applicants must be at least 18 years of age, proficient in English, and committed to learning and engaging with fellow participants throughout the course.

Learn about bringing this course to your organization .

Learner Stories

Digital Marketing Strategy FAQs

What are the learning requirements in order to successfully complete the course, and how are grades assigned.

Participants in Digital Marketing Strategy are eligible for a Certificate of Completion from Harvard Business School Online.

Participants are expected to fully complete all coursework in a thoughtful and timely manner. This will mean meeting each week’s course module deadlines and fully answering questions posed therein. This helps ensure your cohort proceeds through the course at a similar pace and can take full advantage of social learning opportunities. In addition to module and assignment completion, we expect participation in the social learning elements of the course by offering feedback on others’ reflections and contributing to conversations on the platform. Participants who fail to complete the course requirements will not receive a certificate and will not be eligible to retake the course.

More detailed information on course requirements, including the Adobe Data Driven Operating Model Simulation (one of the assignments), will be communicated at the start of the course. No grades are assigned for Digital Marketing Strategy. Participants will either be evaluated as complete or not complete.

Can you tell me a little more about the budget allocation simulation?

The budget allocation simulation (Adobe Data Driven Operating Model Simulation) will be part of module 6 of the course. It is similar to a mini capstone experience, in that it encourages participants to draw on their knowledge from the rest of the course to make investment decisions in the simulation. It is the very same simulation included in the MBA program's required curriculum marketing course, and, while designed to be challenging, it is ungraded and assessed based on completion. We recommend budgeting approximately 1.5 hours to complete the simulation. Full instructions for how to complete the simulation will be provided to course registrants.

What materials will I have access to after completing Digital Marketing Strategy?

You will have access to the materials in every prior module as you progress through the program. Access to course materials and the course platform ends 60 days after the final deadline in the program.

How should I list my certificate on my resume?

Once you've earned your Certificate of Completion, list it on your resume along with the date of completion:

Harvard Business School Online Certificate in Digital Marketing Strategy [Cohort Start Month and Year]

List your certificate on your LinkedIn profile under "Education" with the language from the Credential Verification page:

School: Harvard Business School Online Dates Attended: [The year you participated in the program] Degree: Other; Certificate in Digital Marketing Strategy Field of Study: Leave blank Grade: "Complete" Activities and Societies: Leave blank

Description:

Digital Marketing Strategy is a 7-week, 35-40 hour online certificate program from Harvard Business School. Digital Marketing Strategy equips professionals with the tools, mindset, and trends to make decisions about digital marketing strategy and tactics, including how to position a product or service for success, acquire and engage customers, and measure both performance of near-term campaigns and longer-term customer value.

Related Program

CLIMB enables new and experienced leaders to ignite their careers with a combination of vital and forward-looking business skills, self-reflection, and an immersive cohort-based learning experience with a diverse global network.

Social Listening: The Best Way To Understand Your Audience

Social pros use social listening to proactively monitor social media channels for mentions of their brand, competitors, product, and more.

Table of Contents

If you don’t have a social listening strategy, you’re missing out on some of the most valuable data available to help build your business.

Social media listening tools allow you to build a solid understanding of what customers and potential customers think about you by analyzing what they say on social channels. You can also learn what they think about the competition. This is incredible market research readily available in real-time, as long as you know how to access it.

Want to get right to it? Watch social media expert Nick Martin explain the three steps of social listening in the video below:

If you’d prefer a more detailed guide, read on to learn about:

• What social listening means,
• The benefits of social listening,
• How to do social listening well, and
• Which great social media listening tools you should use.

Bonus : Discover the best way to gather insights and intel from your audience, competitors, industry, and favorite aspirational brands in our complete guide to advanced social listening .

What is social listening?

Social listening is the practice of proactively monitoring social media channels for mentions of your brand, competitor brands, and related keywords.

Social listening lets you track every mention of your brand on social media in real time. You’ll be able to learn how customers feel about your products and services, what they want, and what they don’t want.

But don’t stop at tracking mentions of your brand. With social media listening, you can also:

• Track competing brands,
• Monitor trending content and
• Conduct a sentiment analysis on topics meaningful to your business.

Social listening insights can influence your business decisions, including marketing and product strategy, customer service, and support. You can use the info you gain to make smarter, data-driven calls that can positively impact your business’s bottom line.

Get the all-in-one social media performance engine for HALF OFF.

(This price won’t be around for long!)

The difference between social monitoring and social listening

They sound similar (and they are!), but the difference between social monitoring and social listening is simple. Social media listening is proactive — social monitoring is reactive .

Social monitoring looks at specific brand mentions and sends alerts whenever your brand is mentioned online. It is sometimes referred to as brand monitoring .

Social monitoring is useful for quickly responding to complaints, but it doesn’t give you a big-picture view of what people are saying about your brand or industry.

Social listening , on the other hand, gives you a complete overview of all online conversations related to your brand, products, industry, and competitors . This holistic approach provides valuable insights that can help you make strategic decisions about your marketing and social media strategy.

In short, if you want to stay on top of the latest trends and see what people are saying about your brand over time , you need a social listening strategy.

What does social listening actually look like?

We’ve pulled together a few social listening examples to show you the concept IRL.

Spotify has an entire Twitter account and website dedicated to customer conversations. This type of social listening allows people to come directly to them.

Hey there! Can you give us some more info on what's happening? Can you try logging out > restarting the device > logging back in to see if it makes any difference? We'll be standing by. — SpotifyCares (@SpotifyCares) June 5, 2024

The Spotify Cares account also monitors tagged and untagged mentions, so they never miss an opportunity to offer support.

2. McDonald’s Canada

In 2023, McDonald’s limited edition Grimace shake took over the internet, but Canadian consumers missed out on all the fun — and weren’t quiet about voicing their displeasure.

cant even get the grimace shake in canada what is the point of anything — gizmo ▚▚ @comms (@battleguitar) June 27, 2023

Luckily, McDonald’s Canada was listening. In 2024, they brought the purple shake north of the border.

View this post on Instagram A post shared by McDonald’s 🇨🇦 (@mcdonaldscanada)

Way to pay attention, Ronald McDonald.

Social listening isn’t just about noticing what your customers want, either. Sometimes, it means paying attention to what your competition’s customers don’t want.

After Apple’s “Crush” iPad ad went viral for all the wrong reasons…

Apple apologizes for its iPad "Crush" ad. It will not be shown on TV or receive any paid media. The ad remains up on Apple's YouTube channel and I assume will remain in iPad event replies. Apple came up with the ad internally. https://t.co/Bgrzkjd49M pic.twitter.com/1Tab7ZQp9a — Neil Cybart (@neilcybart) May 9, 2024

…Samsung capitalized on the trending conversation with their own version of the ad.

We would never crush creativity. #UnCrush pic.twitter.com/qvlUqbRlnE — Samsung Mobile US (@SamsungMobileUS) May 15, 2024

When influencer Alix Earle’s summer vacation rental turned out to be a scam, the popular creator turned to TikTok for help.

@alixearle 4 girls 1 cot #positano #girlstrip ♬ hi erica – Cameron

Luckily, Airbnb was listening.

They came to the rescue fast , quickly offering an alternate place for Earle and her friends to stay.

@alixearle THIS IS NOT REAL LIFE. Omg thank you @airbnb for coming to the rescue 🥹😭 #positano #airbnb #italy #girlstrip ♬ original sound – Alix Earle

Not only did Alix Earle get a beautiful new vacation rental, but Airbnb managed to generate some serious goodwill among the creator’s 6M+ TikTok followers.

All thanks to the power of social listening!

The benefits of social listening for your business

If you’re not using social media listening, you’re creating your business strategy with blinders on. Current and prospective customers are already talking about your brand and industry online . It’s in your best interest to listen to what they have to say.

Here are some of the ways social listening can benefit your business.

Understanding your audience

Social media listening helps you better understand what your audience wants from your brand . People will tell you what they want; you just have to listen.

For example, an existing customer might tweet about how much they love your product. Or, you might spot a conversation where people are looking for solutions your product could provide.

In both cases, you can use this feedback to improve your offering and make your customers happier.

Business and product intelligence

Monitoring conversations around the industry also uncovers a ton of insight about what’s working and what’s not. People love to vent, so you can learn about current frustrations with products, both yours and your competitors.

This information is a gold mine for your customer service, product development, and marketing teams .

Once you modify your products/shipments/customer service, tell people about it in a targeted campaign.

Crisis management

Social listening allows you to track sentiment as it changes . You’ll know immediately when the tone of people’s conversations about your brand shifts.

This is like an early warning system for potential crises. Social listening can create opportunities to fix or address issues before they boil over.

If sentiment is down, review the social feedback to identify the change’s source. While you’re at it, look for lessons that could prevent a similar misstep in the future. This can help you address PR disasters before they get out of hand.

The Loblaws boycott, for example, picked up speed by trending on X/Twitter. While Loblaws chose not to address the boycott, they are certainly aware of it and likely monitoring the situation.

TWO MORE DAYS. Loblaws is OUT OF CONTROL. Today I wanted to buy a congratulations card from Shoppers—- it was $10.99!!!!!!!! I did not buy it! From May 1-30, Canadians are boycotting Loblaws Corp. SHOP LOCAL! #BoycottLoblaws #Loblaws #Loblawsisoutofcontrol #Canada pic.twitter.com/MZ3Rn2Dmpr — Daniel James Pike 🐟 (@danieljamespike) April 29, 2024

Customer relationships and acquisition

Social listening can help you uncover questions and conversations about your industry on social platforms. Still, you should refrain from using it as an opening to jump in and try to sell right off the bat.

If you’re going to join a conversation, do it with your audience in mind. What value can you add?

Online, you have the opportunity to develop relationships with potential customers in your industry. Once you have a relationship, you can nurture it for social selling .

What an amazing game of banana ball! And I won the @Zappos giveaway. Go @TheSavBananas — 🐕 Bryce Betts 🐕 (@BryceBetts132) April 27, 2024

Collaboration opportunities

Monitoring social conversations about your industry will give you a sense of who the important creators and thought leaders are in your space . These are important people to connect with. They can have a huge influence on how people feel about you.

Remember : This is a two-way street. Supporting others in your industry makes it more likely they will help you in return. Rather than trying to barge into an existing community, connect through collaborations with people within the community.

Keep an eye out for folks already saying great things about your brand. These are natural brand advocates . Reach out to them and look for opportunities to collaborate in meaningful ways.

Heck yeah! Thank you @BillyFootwear and @Zappos !! Get your pair today and #Kodify your life!! https://t.co/Su7y8jHvaW — Kodi Lee (@Kodileerocks) April 20, 2024

Competitor and industry trends

Social listening is more than understanding what people say about you. It is also important to know what your competition is doing and how people talk about them and your industry.

The conversations you find might reveal a gap in the marketplace you could step up to fill. Or maybe it’s an opportunity to jump in and stir up some friendly competition — for clout, of course.

Wendy’s, for example, is always quick to jump on their competitor’s Tweets.

I’ll say it again https://t.co/ffcEZ9lDNd pic.twitter.com/C0TO0cW54C — Wendy’s (@Wendys) May 1, 2024

Discovering these new opportunities and threats as they happen allows you to plan and respond on the fly.

Uncover market trends

We all know how fast the social media landscape changes. What’s viral one day is passé the next . Staying on top of trends is a full-time job without social listening to do it for you.

Track relevant keywords and hashtags related to your industry to stay ahead of the curve.

You can also use social listening to predict future trends by analyzing what people are talking about now and how those conversations have changed over time.

These insights can shape your content strategy, product development, and marketing campaigns.

Psstt: Read the Hootsuite Trends Report to keep up with new and noteworthy trends.

Improve campaign targeting

Personalization is key to any social advertising campaign . Your audience wants to feel like you’re speaking to them directly and not just churning out generic content.

Social listening will show you the issues your audience cares about, the kind of language they use, and what resonates with them . Think of it like a survey that’s always running in the background.

Use these insights to inform your campaign, from the copy to the visuals. This will help you create content that speaks directly to your audience.

• Customers talking about social burnout? Build a work-life balance guide to show you care.
• People in your target region complaining about the weather? Create a short-term sale on season-appropriate items.
• Seeing an uptick in small business for social media requests? Why not build an entire campaign to help them out?

How to create your own social listening strategy in 5 steps

Jumping straight into social listening without a plan is a good way to get overwhelmed. Make the most of your time and energy by starting with a social media listening strategy.

Here’s how to create one in five simple steps.

Step 1: Decide on your goals

There’s so much data out there. If you don’t first decide on your objectives, you’ll be drowning in information. Determining your goals allows you to filter the noise.

To determine your goals, ask yourself:

• Is it important to know how my brand stacks up against the competition?
• Do I know where we stand in the marketplace?
• Are people enjoying our products? Could they be improved?
• Do we know what our brand sentiment is?
• Do people know we exist?
• Do people know our products or services can solve for [this specific issue]?

The answers to these questions will tell you whether you should focus on brand awareness, outranking your competitors, or improving your product offerings.

Step 2: Decide on the search terms and competitors you should keep an eye on

Once you know what you’re working towards, you’ll have a better idea of the keywords you need to target.

Start making lists of keywords and search terms you’ll need to target. These might cover:

• The keywords associated with your brand or industry
• Your competitor’s names
• The keywords associated with your products or services

Step 3: Choose a social listening tool

Choosing a tool is one of the most important things you must do when setting up a social media listening strategy. We love Hootsuite Streams and Talkwalker for obvious reasons.

Here’s how to easily create your own social listening Streams using Hootsuite:

Head to your Hootsuite Dashboard

Log in to your Hootsuite account and head to your dashboard. If you don’t have an account, don’t fear: It’s easy to sign up .

Add and customize your Streams

On the left-hand menu, navigate to the Streams icon.

Then, click on + New Board in the top left corner, and follow the Board type prompts on the right-hand side of your screen.

You can choose to:

• Monitor your own content . Follow all activity on your own social accounts.
• Discover new content . Keep an eye on competitors, trends, and social conversations.
• Follow personalized feeds . Create custom streams based on any theme or activity in your accounts or those you follow.

The board type you choose will depend on your goals. We recommend setting up multiple Streams to monitor your industry, competitors, accounts and campaigns.

You can adjust the Stream settings to show you more or less content, depending on your preferences.

Here’s a video on fine-tuning your social listening Streams:

Step 4: Take action or compile your findings

Create a system for responding to common social listening findings. Note which comments can be acted on immediately and how and which should be sent up the chain of command.

Some actions can be taken immediately, such as liking or reposting a positive comment or sending a quick response to a complaint.

Some things should be saved for future consideration, like conversational trends, potential brand ambassadors, or recommended product or service updates.

Then, create a spreadsheet to compile your findings. This will help you easily recognize trends and patterns and turn your findings into actionable insights.

Step 5: Use the insights you’ve gleaned to inform your digital strategy

You can better inform your larger digital strategy by:

• Continuously tracking mentions,
• Compiling data from your campaigns and social accounts, and
• Keeping an eye on your brand sentiment.

For example, you might notice people consistently posting about one feature of your product suite. It would make sense to focus your marketing efforts on amplifying this feature.

Whatever you find, be sure to share your social listening report with your team. Social listening analytics can benefit everyone.

3 social media listening tools

Social listening tools pull data from multiple sources, helping you find valuable information about how people are talking about your brand, products/services, and industry.

Here are three social media listening tools you can use today.

Hootsuite’s number one in our hearts, thanks to the user-friendly Streams tool.

Streams allows you to use Hootsuite to monitor conversations, keywords, mentions, and hashtags.

“Game changer for marketers” “…[with] streams, you can get any important activity from any and all platforms on all accounts with a quick glance, being freed from checking into every platform from every account; if somebody retweets or mentions you, you will know ASAP and be able to respond accordingly.” – Aacini H., CFO & Marketing Director

Streams also allows you to stay informed about your industry. You can easily monitor the competition and build relationships with social media creators and potential brand advocates.

It’s an easy tool to set up and monitor, taking the guesswork out of your marketing.

Talkwalker offers more than 50 filters to monitor conversations across 150 million data sources, including blogs, forums, videos, news sites, review sites, and social networks.

You’ll be able to monitor conversations around your brand and measure engagement, potential reach, comments, and sentiment.

Talkwalker is especially useful to spot activity peaks in conversations about your brand. This can help you determine the best times for your brand to post on social media .

Source: Hootsuite

Psst: Hootsuite is set to acquire Talkwalker VERY SOON . This means you’ll have access to Talkwalker social listening and analytics directly in your Hootsuite dashboard!

Want to get more advanced with your social media listening? Brandwatch ‘s features allow you to segment and analyze data and uncover actionable insights.

Insights also makes it easy to anticipate trends, measure campaigns, and stop a growing crisis with social data.

5 pro tips for social listening

1. listen for the right words and topics.

Successful social listening is all about choosing the most relevant keywords for your brand.

The keywords and topics you monitor will likely evolve over time. Social listening tools can teach you what kinds of words people use when discussing your business and your industry. You’ll also start to understand the insights that are most useful to you.

If you need help getting started, here’s a list of important keywords and topics to monitor:

• Your brand name and handles
• Your product name(s)
• Your competitors’ brand names, product names, and handles
• Industry buzzwords
• Your slogan and those of your competitors
• Names of key people in your company and your competitors’ companies (your CEO, spokesperson, etc.)
• Campaign names or keywords
• Your branded hashtags and those of your competitors
• Unbranded hashtags related to your industry

You can also monitor common misspellings and abbreviations.

2. Listen in the right places

Part of discovering what your audience has to say about you is learning where they have their conversations.

You need to know where people are talking about you and your industry and how those conversations vary across networks.

For example, do they praise you on Instagram but voice complaints on X/Twitter?

This behavior will guide your marketing strategy for joining the conversation through both organic engagement and paid advertising .

3. Narrow your search

Once you’ve determined which terms and networks you should monitor, you can use more advanced search techniques to filter your results.

For example, depending on your market, you might want to limit your social listening efforts by geography. You won’t be concerned about the conversation in Greece if you run a local business in Iowa.

4. Share what you learn

Social listening provides a wide range of useful information for your whole company.

The customer service, content marketing, and product development teams could all benefit from what you learn while listening on social media. Make sure to communicate your insights and seek input from those teams, too. They might have specific questions you could answer by tweaking your social listening setup.

5. False positives are okay (within reason)

When you set up a query to monitor for a specific keyword or phrase, some posts that might not be relevant will sneak into the results. We call these false positives.

It’s okay to see a few of these within reason. Hootsuite’s social marketing team tries to get false positives below the 5% threshold.

Work to refine your search queries so that the majority of your results match what you’re looking for.

Hootsuite makes it easy to monitor keywords and conversations on social media, so you can focus on taking action on the insights available. Try it free today.

With files from Christina Newberry and Hannah Macready .

All your social media analytics in one place . Use Hootsuite to see what’s working and where to improve performance.

Become a better social marketer.

Get expert social media advice delivered straight to your inbox.

Colleen Christison is a freelance copywriter, copy editor, and brand communications specialist. She spent the first six years of her career in award-winning agencies like Major Tom, writing for social media and websites and developing branding campaigns. Following her agency career, Colleen built her own writing practice, working with brands like Mission Hill Winery, The Prevail Project, and AntiSocial Media.

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9 Strategies To Achieve a Higher Conversion Rate

Learn nine different strategies to bump up your conversion rate site-wide in this guide.

Conversion rate is the holy grail metric for many ecommerce websites. The higher the percentage of people who visit your site and buy something, the more profitable your business can become. There’s no need to increase marketing budgets to drive them back.

A higher ecommerce conversion rate also significantly influences total cost of ownership . How much it costs to operate your ecommerce site should be a fraction of the revenue you’re generating from it. 

Considering the average conversion rate for an ecommerce site is just 5.2% , there’s tons of room for improvement. Assuming your average order value is $50 and you generate 80,000 monthly sessions, just a 1% higher conversion rate could net $40,000 in extra revenue every month. In this guide, we’ll share nine different strategies to bump up yours and increase conversion rate site-wide.

Essential factors impacting conversion rate

Conversion rate is a complex metric that’s impacted by multiple factors across the entire buying journey. A few of the most essential include:

• Website design: According to CXL , people form their first impression of a website within a tenth of a second, and 94% of those opinions are design-related. You never get a second chance to make a first impression, so make sure your website design is responsive, professional, and engaging. 
• User experience: You’ll stand a hard chance at converting website visitors if they struggle to interact with your ecommerce store. Simply ensuring that the site works and is free from glitches can prevent 17% of people who’d otherwise abandon their online cart.
• Calls to action: What counts as a conversion on your site will differ by page, but shoppers must know what the next step is if you’re to stand any chance at securing a higher conversion rate. Buttons make this desired action clear and obvious. 
• Urgency: Time-sensitive offers convert up to 332% more visitors than evergreen deals. When people have a limited time frame to take advantage of an offer, there’s no reason to exit your site with a mental note to return later. 
• Relevance: When your website caters to a buyer’s goals, pain points, and motivations, it becomes a no-brainer to purchase what you’re selling. 

Strategies to achieve a higher conversion rate

Optimize the checkout process.

Conversions live or die at the checkout. Baymard ’s research found that 70.19% of shopping carts are abandoned. Extra costs are the main driver of exited carts, accounting for almost half, shortly followed by sites that require shoppers to create accounts (26%) and a lack of trust in the website (25%).

Instead of pushing more traffic to your site in a bid to get a higher conversion rate, look at optimizing the checkout flow you’re providing to existing customers. The cost of acquisition can go down significantly with a great checkout experience.

Effective techniques to optimize the checkout process include:

• Allowing guest checkout: Some 26% of abandoned carts happen because the retailer required the customer to create an account. Guest checkout allows people to bypass unnecessary form fields, leaving them less time to second-guess their buying decision. 
• Showcasing trust signals: “Can I trust this brand with my sensitive information?” is a question that runs through most customers’ minds. For a quarter of online shoppers, the answer is no. Prevent these people from exiting your site with trust signals like five-star reviews, customer testimonials, and money-back guarantees.
• Accepting various payment methods: The same report found 13% of people abandon their cart because the retailer didn’t accept their preferred payment method. Cover all bases by accepting debit or credit cards, mobile wallets, and buy now, pay later services through Shopify’s integration with AfterPay . 

“Our customers' experience is the most important thing to us,” says Kyla Robinson, vice president of digital product at Spanx . “They need to trust our checkout as much as they trust our products–and recognize the path to purchase as easily as they recognize our brand.” 

Shopify checkout does the hard work for you. Ranked the #1 converting accelerated checkout on the internet*, Shop Pay allows you to offer guest checkout and accept multiple payment methods. Plus, when customers save their card details on another retailer’s website that also offers Shop Pay, they can buy items using stored credit card information to checkout in one click.

The best part? Shopify’s overall conversion rate outpaces the competition by up to 36% and by an average of 15%. And even if someone doesn't use Shop Pay, the presence itself leads to a 5% conversion lift.

Communicate your value proposition

Shoppers are more price sensitive than ever before. Retail Economics and Metapack found that inflation is a concern for 57% of all consumers . This uncertainty on whether they’re getting the best product for the best price can drive people away from your site and therefore worsen conversion rates. 

This is where your value proposition comes into use. The statement tells people why they should choose your brand over a competitor. And if someone knows that the brand they’re shopping with shares the same values as themselves, there’s one less reason to exit the site in search of a competitor that does.

Phantila Phataraprasit, founder of Sabai Design , is one retailer using the sustainable angle. “We ourselves are part of a demographic that is very aware of our impact on the planet,” Phantila says. “The climate crisis is such a top of mind issue for us. And so being part of a demographic that's younger and so we're also on a budget, we wanted to create a solution that spoke to those values, but then also took into account accessibility and budget as well.” 

Remove distractions

The longer someone has to debate their purchase, the more chance they have of exiting your site without becoming a paying customer. Speed up a potential customer’s buying process by limiting any unnecessary distractions such as:

• Pop-up boxes: Pop-up boxes that ask for a customer’s email address or phone number can be intrusive, especially on mobile devices when they take up the entire page. 
• Too many calls to action: The paradox of choice is a psychological bias where people find it hard to make a decision when they’re presented with too many options. Stick with one call to action per page. If that’s a product page, it might be “Add to cart.” If it’s a landing page, it might be “Take the quiz” or “Opt into emails.”
• Form fields: If people need to complete a form (like a checkout form or email subscription), only ask for the required details. Baymard’s report shows 22% of people abandon the checkout process because the checkout process was too long. 

These website elements do still offer their advantages. In particular, pop-up boxes cater to two-thirds of millennial and Gen Z shoppers who are willing to pause their shopping journey until they receive a coupon.

Provide people with the promotions they’re searching for with time-based or exit intent pop-up boxes. These only appear after someone displays an intention to leave the site, or if they’ve already been lingering on a specific page for a long time.

Offer free shipping

Sometimes it’s not the product that a customer is debating, it’s how they’ll receive it—and whether it’ll come at an extra cost. Over 68% of global consumers say they’re more likely to buy a product online if free shipping is on offer, beating next-day delivery in terms of preference. But the issue is that someone does pay for shipping. If it’s not your customers, it’ll be you.

The simplest way to negate shipping costs is to negotiate shipping rates with carriers. Shopify Shipping handles the first aspect. Baking delivery rates into your product pricing strategy solves the other. If an item costs $34, you could bump the product’s RRP up to $39 to cover the flat-rate cost of shipping. Then buy the discounted label through Shopify Shipping and still turn a profit (depending on the item you’re shipping).

If profit margins are tight or price-sensitive customers won’t pay the markup, set a free shipping threshold. It’ll incentivize customers to complete their purchase and spend more, especially considering 78% of online shoppers will spend more money to qualify for free delivery .

Run personalized marketing campaigns across the funnel 

People flow through a specific customer journey before they convert on your online store. This is demonstrated in the marketing funnel—a logical process that starts with someone first becoming aware of your brand, through to making the decision to buy from your storefront. 

Customer journey maps help you paint a more accurate picture of what your marketing funnel should look like. Run an ecommerce data analysis to pinpoint the touchpoints someone has prior to converting, and map your marketing campaigns to reach people with the messaging that’s most likely to help them progress to the next stage. 

“We have just achieved a £35K return on a £750 test campaign ad spend for a sports and leisure client that was all down to our multi-channel marketing approach,” says Geoff Haigh, head of operations at 10 Yetis . “Taking consumers through the initial discovery, consideration, and research stages via one social platform, through to making sales either natively in the same platform or directly through to the Shopify-powered store.” 

The most important aspect of a multichannel marketing campaign? Consistency. “Our customers expect a seamless experience, regardless of the channel they are using,” says Kerri Economopoulos, managing director of Titan AV . “Maintaining a consistent brand message, visuals, and tone across multiple channels has been challenging but Shopify Plus has allowed us to centralize our branding to efficiently and consistently manage all our channels from a single dashboard.”

Address objections on product and landing pages

Website visitors will only convert into paying customers if they’re confident that they’re making the right decision. Any sales objections that they’re pondering beforehand must be answered confidently, such as:

• Are there any extra costs associated with my order?
• Can I get this item cheaper elsewhere?
• Will I be waiting too long for delivery?
• What do my options look like if I need to return the product?
• Does the site accept my preferred payment method?
• Is this really important to me right now?

Peepers is an example of how product pages can be optimized to address these concerns. The photography carousel promotes their virtual try-on service that helps people confidently choose the sunglasses that best suit their style.

There are also five-star ratings beside the product price to address any value concerns, and mentions of the brand’s free shipping and returns policy to cater to on-the-fence shoppers.

Incorporate social proof

Speaking of sales objections, trust is a common barrier that prevents people from converting. Baymard found that a quarter of online carts are abandoned because the potential customer didn’t trust the site with their sensitive information. It’s a sentiment shared with most online shoppers: 8% of Americans have already been personally victimized by scammers.

You don’t need to become a household name in order to build trust and increase your conversion rate. Social proof psychology shows that when people are uncertain about something, they’ll look to others for guidance—including whether they should make a purchase.

Powerful social proof elements to experiment with in your quest of higher conversion rates include:

• Third-party scientific tests and studies
• Case studies, testimonials, and reviews
• Influencer or celebrity endorsements
• Endorsements from trusted advisors

Hiya Health , for example, has an endorsement from a pediatric specialist for its vitamin gummies that are marketed at children. People are more likely to trust that the gummies are, in fact, good for their children’s health if they’re endorsed by a professional.

Localize your storefront for international shoppers

The beauty of global ecommerce is that you can sell to anyone, anywhere. But it’s not as simple as driving website traffic to your site in hotspots of potential customers. The experience they’re receiving on your online store plays a major role in how likely they are to convert—starting with the language they’re reading in. 

Shopify data shows a 13% relative increase in conversion rates when buyers are shown a store translated into their own language (versus the store’s default). The simplest way to cater to these languages is with Shopify’s Translate & Adapt app, which auto-translates your store into two of your customer’s most frequently spoken languages.

Pair the translation app with Shopify Markets Pro for greater localization for international shoppers. When an overseas customer visits your store, the tool will automatically detect which country they’re in and divert them to the online storefront that’s already been localized for that region. You’ll be able to accept 136 different currencies when processing online payments, and boost conversions at checkout by including taxes, duties, and tariffs in order totals. 

Run A/B tests to maintain high conversion rates

Conversion rate optimization is an ongoing process. What works this month might not work next month as customer preferences, markets, and competitors are constantly evolving. 

Split-testing, also known as A/B testing, helps you stay ahead of the curve. You can proactively test website elements to determine which messaging, creatives, or design your website visitors respond best to. It works by monitoring the conversion rate on a page, then making a single tweak or adjustment, and running the new version for the same length of time with no other changes. Any increase or decrease in conversion rates can be safely attributed to the element you’ve changed, such as:

• Website or sales copy
• Value proposition
• Social proof elements
• Formatting choices
• Images or video

"The strategy with ads and marketing, we try to be as proactive as possible,” says Selom Agbitor, cofounder of Mad Rabbit . “If you're reactive, you're just waiting for someone else to do something for you to copy. 

“We tried our best to make sure that whatever we are putting out there is a new concept and we also made sure that we were testing a lot of different things to try to find what was working. The key to being successful was testing and making sure whatever you're putting out, your audience can resonate and engage with it to end up purchasing from you.”

Measuring the success of conversion rate efforts

The phrase conversion rate is most frequently used to describe the percentage of website visitors who convert into paying customers. But conversion rate can span a range of actions. We can describe most of them as micro conversions—smaller activities that someone takes to progress further down the funnel, such as email sign-ups, “add to cart” button clicks, or live chat submissions.

Consider the conversion rates of these micro conversions to see the bigger picture on how effective your page is. Your product page might have a purchase conversion rate of just 0.2%, but if 15% of the people who land there end up adding something to their cart, it might be the checkout page that’s causing them to drop off. 

Other important metrics to consider when evaluating the success of your conversion rate strategy include:

• Bounce rate: This metric shows the percentage of people who land on your ecommerce site and only visit one page before exiting. A high bounce rate is considered to be anything above 40%. Shortlist pages that exceed this benchmark for optimization. The more pages a person visits per session, the more chance you have at convincing them to buy. 
• Scroll depth: This CRO metric shows how far people tend to scroll down your page. A low scroll depth (combined with low conversion rates for above-the-fold calls to action) indicates that the top of your page needs optimizing. 
• Customer acquisition cost: Higher conversion rates are associated with lower customer acquisition costs since you’re not forking out extra money to drive potential customers back to your ecommerce site. 

Conversion optimization tools and technologies

Your website toolstack plays a huge role in not only your ability to make changes on the fly, but also to monitor conversion rates as your strategy develops. The most important bases to cover include:

• Website analytics: Shopify’s ecommerce reports show your overall conversion rate, though you can supplement this data with Google Analytics or combine it with other data sources through Shopify apps like Triple Whale . 
• Page builders: If website developers aren’t accessible or you want to make smaller changes to your site, page builder apps like Shogun and PageFly offer drag-and-drop editors. Most tools also allow you to create different variations of a product or landing page for split-testing.
• Heat mapping tools: What do website visitors look at when they’re just about to exit your page? Spot these conversion killers and prioritize these page sections for A/B testing with scroll maps in tools like Hotjar . 
• Marketing automation tools: Instead of manually pushing digital marketing messages to potential customers who are lingering in specific parts of your conversion funnel, use apps like Klaviyo or Drip to detect who is where and which messaging would be most effective at pushing them through. 
• Customer relationship management (CRM) software: Sometimes website visitors need a more hands-on approach. CRM software allows you to combine support tickets from multiple communication channels (like live chat, email, and social media) to build customer profiles that give a 360-view of what a customer needs.

“As a Shopify Plus customer, we have access to the tools, apps, and integrations needed to succeed in a multichannel world, allowing us to put the customer first and deliver a seamless experience across all channels that builds trust and loyalty in our brand whilst driving growth for our business,” says Titan AV’s Kerri Economopoulos.

Case studies on conversion rate improvements

All4cycling.

All4cycling is an expert-led brand that was founded by former professional cyclist Luca Nardello. Part of their marketing strategy is partnering with cycling events like Giro d’Italia and the Tour de France—peak times for the brand since they’re exposed to a huge volume of cycling enthusiasts during either event. 

All4cycling migrated to Shopify Plus with hopes of converting these peaks in incoming traffic. They did so with Shopify Flow . “With the tagging functionality we are now able to manage the management system independently, saving time to the administration department,” says their IT manager Silvana Scimone. “We have created flows and rules that enable us to manage orders and invoicing.”

The cycling retailer also took advantage of Shopify Markets to localize the shopping experience for its international customers. Those looking to buy from the brand could see products in their preferred language and currency, which founder Luca Nardello says helped All4cycling “change the look and feel of the website, adapting the shopping experience to the local market.”

The migration to Shopify Plus was a smart decision. Traffic to All4cycling’s website increased by 25%, and those shoppers are converting. The brand’s conversion rate skyrocketed by more than 40%, resulting in a 35% increase in turnover. 

Stoov sells heated blankets and cushions from their online storefront, which was previously hosted on Lightspeed. Stoov needed a website infrastructure that could handle multiple SKUs and personalize the shopping experience for international customers, therefore making the switch to Shopify Plus a relatively obvious decision.

Stoov worked with Code , a Shopify Plus partner agency, to build a new online storefront. They installed 30 apps from the Shopify App Store (like Klaviyo for email marketing and Gorgias for customer support enquiries), helping the brand reach international shoppers and sell an infinite number of products. 

Since moving to Shopify Plus and localizing their site, Stoov has gone from selling 10,000 products in 2019 to half a million in 2022 alone. They’ve also seen higher conversion rates, jumping from 2.2% in 2021 to 2.8% the following year. 

Stoov’s plans to sell internationally are only just beginning. “We would like to expand to the United States,” says their technology manager Joost van der Weiden. “It will be a big thing, but it's on our list. There are also talks about growing to Australia! With Shopify Plus we can now go everywhere.”

Filtrous is a multimillion dollar company that sells laboratory supplies online. They prove that CRO isn’t just for direct-to-consumer brands. In a bid to stand out from old school distributors, Filtrous replatformed to Shopify Plus to give B2B buyers more personalized buying experiences that wholesale typically lacks. That included features such as:

• Shopify Flow to automate repetitive tasks
• Customer-specific catalogs and price lists 
• Vaulted credit cards to save payment details securely
• Customizable discounts 

“The constant updates to B2B on Shopify have left us pleasantly surprised,” said Filtrou’s director of ecommerce Yin Fu. “It seems like these releases are highly tailored to the needs of B2B merchants and makes us feel like we’re being heard.”

Not only did Filtrous launch their new wholesale storefront in around two months, but the new and improved B2B buying experience significantly impacted conversion rates. B2B customers can now self-serve, helping Filtrous increase their organic conversion rate by 27%.

Integrate conversion rate optimization into your business strategy

Conversion rate optimization is an ongoing task. By continuously monitoring and tweaking your strategies, you’ll spot patterns in consumer preferences and maintain optimal conversion rates. This helps reduce total cost of ownership and enhance profitability in the long term. 

Higher conversion rate FAQ

What is considered a high conversion rate in ecommerce.

The average conversion rate for an ecommerce website is 5.2%. Anything above this figure is considered a high conversion rate.

How can I measure the improvement in conversion rates?

Divide your total website visitors by the number of people who convert into paying customers to find your purchase conversion rate. Alternatively, consult your Shopify analytics to see your site’s conversion rate. Monitor this metric to determine the success of your conversion rate optimization strategy.

What are quick wins to boost conversion rates online?

• Optimize the checkout page.
• Incorporate social proof.
• Run A/B tests.
• Offer free shipping.
• Share your value proposition.
• Limit distractions on your website.
• Run personalized omnichannel marketing campaigns.

How often should I optimize my website for better conversions?

There is no “best practice” for how often you should optimize a website. Generally speaking, high-traffic websites can afford to run more A/B tests because the control and variant groups will generate enough data for your conclusion to be statistically significant.

What are common misconceptions about conversion rates?

• CRO is just for DTC ecommerce websites.
• You should copy your competitor’s website design.
• It’s okay to make multiple changes in an A/B test.
• Website changes should be based on a hunch, not data.
• Conversion rate optimization is a one-time task.

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