How McDonald's use the 7P's of marketing
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| Source: marketingmix.co.uk
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Product
McDonald's are a company who know the importance of product. McDonald's know that there are countless places a customer could spend their money and so they conduct copious amounts of market research in order to get their menu and their products just right for their customers. Product has been described as "the aspect of the marketing mix that deals with researching consumers' product wants and designing a product with the desired characteristics" (dibb et al, 2016).
McDonald's have a large range of products that file under their product mix. Kotler (2014) describe the product mix as the total mix of products a company offers to its customers. Tied in with the product mix are independent product items. As customers have all different likes and dislikes, McDonald's offer various different products such as beef, chicken, pork, fish, vegetarian options, milkshakes and ice-cream so whatever you are in the mood for, McDonald's probably has an option for you. The different options of meals can be thought of as a product line as there as burgers, wraps, sandwiches and kids meals, which all have different options and variations.
Source of image above: Lianhua's Blog (2013)
To try and keep things up to date and current, McDonald's undergo a regular process of introducing new products, and extinguishing the older ones. Each new product goes through a product life cycle. The product life cycle, as defined by The Economic Times (2015), is "the cycle through which every product goes through from introduction to withdrawal or eventual demise". It is made up of four stages; introduction, growth, maturity and decline. The product life cycle allows a company to monitor their products to see what are doing well and what not so well in terms of popularity and profit, and allows them to take action faster when adjusting their product mix. In terms of McDonald's, they have introduced a new line of burgers called "the great tastes of the world" which include items such as the 'South African Stack', 'Mexican Stack' and the 'Thai Special' which have all proven to be popular with customers. The graph below shows the cycle a McDonald's product goes through. (McDonald's, 2016)
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| Source: Business Case Studies
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Branding is a vital part of the product process. Entrepreneur (2016) state that branding is "the marketing practice of creating a name, symbol or design that identifies and differentiates a product from other products." A strong brand is needed in order for customers be able to identify a product or business and allows a customer to know exactly what they like and what the don't. McDonald's acquired its infamous brand name in 1955 when the founder, Ray Kroc, became the agent to Dick and Mac McDonald who were two brothers with a small but triumphant restaurant business which only served burgers, fries and drinks. Kroc pitched the idea of opening up McDonald's restaurants all over the US and six years on and Kroc bought the rights to the name. The McDonald's brand was now established (Quora, 2015).
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| Source:Reader's Digest |
Some of the key branding objectives for any company are Brand recognition and Brand Preference. Brand recognition is defined by Dibb et al (2016) as a customers awareness that a brand exists and brand preference is stated as being the degree of brand loyalty where a customer prefers one brand to another. These are not problems McDonald's face as their golden arches of their logo are now widely recognised all over the world with them being ranked 15th in a list of the 100 top most powerful brands, a survey taken by Tenet Partners, Corebrand in 2016. The image shown is the iconic McDonald's logo which has been branded by the company.
Promotion
In order to raise awareness of a product and try and get people to purchase products, organisations will tend to use promotions. Dibb et al (2016) describe promotion as being "the aspect that relates to marketing communications used to inform one or more groups of people about an organisation and its products". Examples of types of promotional tools that can be used are things such as advertising, PR, direct marketing and personal selling.
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| Source: Smart Insights |
To try and attract customers towards their business, McDonald's use advertising techniques. "Advertising is attempting to influence the buying behaviour of your customers or clients by providing a persuasive selling message about your products" (The Balance, 2016). McDonald's use resources such as TV, radio, the internet, newspapers and billboards to raise awareness of the brand and appear to use the AIDA
advertising technique. AIDA is a process of advertising which has been around and being used by companies since the 1890's. The letters of the acronym stand for advertising, interest, desire and action and is used in marketing and advertising to communicate ideas to customers and describes the sequence of events that happens when a customer views and advertisement (Boundless, 2015). It has been said that there are three main purposes of advertisement which are to "make people aware of an item, feel positive about it, and remember it" (McDonald's, 2015)
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| Source: Design School |
In terms of awareness, McDonald's tend to use big flashy billboards. This is useful as if they have a new product coming out, people walking past the picture and potential new customers will have their attention grabbed by an eye-catching or possibly humorous billboard and may be persuaded to visit. The pictures shown are billboards that have been put up by McDonald's in order to try and raise awareness of the franchise and promote the business.
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| Source: Inrix |
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| Source: Ads of the World |
To try and create Interest, McDonald's will often produce TV advertisements that show any promotions or deals they have on at a certain time, such as the introduction of the 'savers menu' which had products such as a chicken burger for only 99p. The video below was an advert made to promote this menu. Once consumers have seen the advertisement and can see how cheap the products are, they may be interested to go out and buy the product. Using a humorous advert such as this one may grab people's attention and when they see how cheap the new products are, they may be interested to go out and buy something.
Source : YouTube
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| Source: Lancashire Telegraph |
Next off, desire. McDonald's will often send out coupons and money off vouchers. If people know that they are getting a special deal or a discount, it will be likely to encourage customers to buy their products and will in turn promote repeat custom. This would especially be good for customers who may have low income and a reduced price would give them more of a desire to visit McDonald's and purchase an item. These are often printed in newspapers and magazines. The Picture across is an example of a coupon, that was placed in the Lancashire Telegraph, offering selected meals for £1.99 which would save people £1.20.
And lastly, action. All the promotional advertising techniques and activities McDonalds' use appear to work well and get people in the door. The flashy ads and newspapers coupons make customers want to take action and visit a McDonald's as in they serve an average of 3.5 million customers a day in the U.K. alone. (McDonald's, 2011)
Another form of promotion used by McDonald's is public relations. The Chartered Institution of Public Relations define PR as "the discipline which looks after reputation, with the aim of earning understanding and support and influencing opinion and behaviour". (CIPR, 2015). A way in which to use PR as a form of promotion can be to hold a large event which is open to the public and will attract the surrounding community. It is useful to get the media involved and let them know about such an event in order to raise awareness of it and promote whatever you are trying to sell. If products are being given out for free, passers by will become intrigued and may be encouraged to stop and try the product. McDonald's took part in this type of strategy when they released their new all-day breakfast in America in which they gave out free breakfast items to members of the public. As they reached out to various media sources, a story was made out of this which brought McDonald's widespread attention to the new product that they were introducing. A news story such as this is a free promotional tool can give good publicity to a company. (AXIPR, 2015)
Place
McDonald's are always looking to set up their restaurants in the best locations that will maximise profits and sales. They own around 36,000 restaurants in 118 countries and territories all over the world. (McDonald's, 2001)
Dibb et al (2016) describe the place variable as " the aspect of the marketing mix that deals with making products available, in the quantities desired, to as many customers as possible". Location is important for the fast food chain as the it is vital that the product is accessible to the customer at 'the right place, at the right time, in the right quantity' (Dhavale, 2012). Kotler et al (2001, p.513) states that "retailers, particularly fast food chains, often state their 7P's of marketing to be, that is location, location, location, location, location, location and location". This emphasises that the area the restaurant is placed in essential when it comes to attracting customers and making sales.
McDonald's place considerable importance on convince, not just with now fast they serve their products but also with being able to access one of the restaurants. In America, almost 50% of the chains are situated so that you are rarely more than a few minutes walking distance away from one in the city, or a few minutes car journey away in the suburbs (Point, 2013). The picture inserted below is a map of the United States which has all the McDonald's restaurants pinpointed in red and blue. This shows that there is not a shortage of the fast food chain in America.
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| Source: Reason.com |
The place variable of the marketing mix can also be know as a distribution channel. A distribution channel can be defined as "the activities and process required to move a product from the producer to the customer". As part of this process, intermediaries are required which are third party companies such as retailers, wholesalers and transporters (Moose, 2016). According to Dibb et al (2016), the purpose of intermediaries is to bring buyers and sellers together, partake in negotiation and communication and to provide advice and repairs. Distribution is a vital part of place and of the marketing mix as if products are not available, there is nothing for the customers to purchase and the organisation will ultimately lose money and fail.
McDonald's tend to use the distribution method of intensive distribution which is defined by Dibb et al (2016) as "the use of all available outlets for distributing a product". The way McDonald's use this is by having their restaurants open 24 hours a day, which in turn meets customers wants and needs and allows customers to visit the franchise anywhere and any time (Moose,2016). In order to make more profit and ultimately sell more products, McDonald's also distribute their products in kiosks, Postmates website and app and the McDonald's mobile app. Using these, customers can place their orders and claim special deals. The kiosks only sell a limited range of products, for example, dessert items and are sometimes only seasonal (Meyer, 2015). The figures below show examples of a McDonald's kiosk and the app which allows you to order food quicker and easier.
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| Source: Deal News |
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| Source: Reddit |
McDonald's are not all about the restaurants and the locations of them, they also have a large online presence. They use social media sites such as Facebook and Twitter. The McDonald's Facebook page has over 27million fans on their US page alone and their posts receive hundreds of thousands of 'likes'. Although they post as little as five updates per month, fans of the page still regularly like and comment on the posts. McDonald's use their Facebook page to post alerts about new products on their menu and to advertise their product range. The US McDonald's Twitter page has a staggering 995,000 followers and known to post a number of updates about the company each day. The team who run the social media account also respond to a handful of tweets each day, but only is respond to positive comments. This is possibly due to the social media backfire they had in 2012 when people began to tweet complains and negative comments about the organisations service and standard of food using the hashtag #McDStories! McDonald's started this hashtag with the hopes that it would provoke positive stories and happy memories of the brand, but unfortunately it took a turn for the worse (Quaid, 2013).
Links to McDonald's Facebook and Twitter pages:
Facebook-
Twitter-
The figures below show examples of McDonald's Facebook and Twitter pages.
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| Source:The Sociable |
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| Source: Econsultancy.com |
People
McDonalds place considerable empathises on the people who work there. McDonald's (2008) quoted "we put people at the centre of everything we do, and that goes for our employees as much as our customers". Their philosophy, set up by the founder of the organisation Ray Kroc, is described using the analogy of a 'three-legged stool'. The three legs of the stool represent the McDonald's franchise, the suppliers and thirdly, the employees. The stool will only stand if all three parts worked together (McDonald's, 2016). The people variable has been defined by Dibb et al (2016) as "the aspect that reflects the level of customer service, advice and sales support, involving recruitment policies, training, retention and motivation of key personnel".
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| Source: The Business Times |
In the process of training the staff, McDonald's spend around £43 million per year in the development and training of employees as their aim is to help them reach their full potential and progress as much as they possibly can. In regards to staff training, Dibb et al (2016) state "regardless of whether the training programme is complex or simple, its developers must consider who should be trained, what should be taught and how the training should occur. A lot of the training in McDonald's is on-the-job hands on learning with some online training incorporated as well (McDonald's,2013). New employees are given a buddy system with an experience member of staff where they work 'should-to-shoulder' in order to learn all the required skills of the 11 work stations situated in the restaurant. The online training involves new staff members filling out workbooks on cleanliness, quality and service as these are all aspects that are of specific importance to the franchise. (Business case studies, 1995).
When it comes to employment, McDonald's have been acknowledged by the 'Great Place to Work institute' and were also rated as being one of the best organisations to work for by the 'Sunday Times Best Big Companies to Work For' list. McDonald's undertake 'crew and management development programmes' which is a training and development tool used to asses employees knowledge and of the job and their performance. Employees also receive monthly chats with their manager to see how they are finding the job (McDonald's, 2013).
In terms of their staff, McDonald's know the importance of making them feeling motivated and giving them the correct recognition and reward. The fast food chain believe they have enhanced performance and work rate by making sure all their reward programmes are in line with their business strategy. McDonald's believe that motivation is of vital significance for keeping their employees working at their full potential. After each month and based on the scores rated by mystery shoppers, all staff in the top 10% of restaurants receive a 50p bonus for each hour they have worked over the period of two weeks. Another project which saw a sore in productivity and motivation was 'Road to Rio initiative' set up in 2014 which, based on customer ratings between February to April 2014, allowed the staff in the top 5% restaurants to be entered into a prize draw to win a trip to World Cup in Brazil. McDonald's were the sponsors of the FIFA World Cup which meant they were able to fly 11 lucky winning staff members out to Rio for the event. The whole competition was a win win for the company, it boosted staff morale and gave them motivation to do well and help insure the staff were delivery excellent customer service. This reward scheme saw McDonald's being shortlisted for the 'Most Motivational Benefits' award at the Employment Benefits
Awards 2015. (Crawford, 2015)
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| Source: McDonald's |
