McDonalds_Marketing Strategy

History•1948–McDonaldbrothersopenthefirstMcDonald’sandnamesSpeedeeastheircompanyimage.•1954–RayKrock,amultimixersalesmanbecomesthefranchisingagent.•1955-RayKrocopenstheDesPlainesrestaurant.The1stday’srevenues-$366.12•1957–RayKrochandsoutfreehamburgerstoSalvationArmyguests•1958–Salesgrow151%•1961–RayKrocbuyouttheMcDonaldsbrothersfor$2.7million•1963–RonaldMcDonaldisintroduced•1965-McDonald’sgoespublicwiththecompany’sfirstofferingonthestockexchangefor$22.50pershare.–Firsttelevisioncommercialisaired•=krXP_TUZqskHistory•1966–McDonald’sstockssplitforthefirsttime.•1967-BigMacinvented–McDonald’sinCanadaandPuertoRicoopen•1971-“Makadonaldo”(Japan)•1973-EggMcMuffininvented•1974-RonaldMcDonaldHouseopened•1979-HappyMealsintroduced•1979-present-ContinuedgrowthProblems•CustomerService–McDonald’siscurrentlyrankedlastamongstitstopcompetitorsintheFFHRsubsector.•#1–BurgerKing•#2–Wendy’s•#3–McDonald’s–Thismaynotsoundbadatfirstglance,butwhenyoulookatthefactthatthesethreecompetitorshold73%oftheFFHRmarket,itputsitintoperspective.Problems(cont.)•HealthIssuesSWOTAnalysis-Strengths•WorldwideBrandRecognition•41%ofallfast-foodvisitsareforhamburgers–McDonald’shas44%ofUSfast-foodhamburgerbusiness•Over70%oftherestaurantsareindependentlyowned•RankednumberoneinFortunemagazine’s2008listof“mostadmiredfoodservicecompanies.”Overseasmarket•Over31,000restaurantsinover120countries.SWOTAnalysis–Strengths(cont)•Qualitymeasuresthroughsupplychainmanagement•Encouragenewideasfromwithin–BigMac–EggMcMuffin•Largeavailableamountsofcapitalforfuturerestaurantsduetoholdingalimitednumberofcorporateownedrestaurants.•EconomiesofscaleSWOTAnalysis-Weaknesses•Weakproductdevelopment•Poorrelationshipswithfranchisees•Fluctuationsinprofit(whichhasbeenimprovedin2008afterthefranchisingofmanycorporateownedrestaurants)Revenues&Profitability:McDonald'sCorporation0.005000.0010000.0015000.0020000.0025000.0020042005200620072008YearUSMillions0.00%5.00%10.00%15.00%20.00%ProfitMargin(%)RevenuesNetIncomeProfitMarginSWOTAnalysis-Opportunities•Internationalexpansionthroughcontinuedfranchiseopportunities–Onlyserving1%oftheworld’spopulation•Growthinthebeverageindustry(by2011-$71.4billioninsaleswith70.8%beingcoffeedrinks)•Introductionoflocalofferings(i.e.TechBurgerwithspecialcondimentsandtoppings)SWOTAnalysis-Threats•Matureindustry•Strengthofcompetition•Morehealth-consciousconsumers•Changingdemographics•Fluctuationofforeignexchangerates•IncreasingcommodityandfuelpricesCompetition•Top–BurgerKing–14%–Wendy’s–13%•Otherstrongcompetitors–Sonic–6%–JackintheBox–4%–Hardee’s–3%–WhiteCastle–1%MarketingTechniques•Product“Image”•Customersassociatewiththebrand•Domestic•GlobalMarketingTechniques(cont.)•Originalsymbol“Speedee”•GoldenArches•Buildingstructureandcolors•LocaladvertisingSlogans•“Yourkindofplace”(1967)•“Youdeserveabreaktoday”(1971)•“Wedoitallforyou”(1965)•“Haveyouhadyourbreaktoday”(1995)•“I’mlovinit”(2003)MarketingMix•FiveP’s•MarketingandCommunications•Responsibility•McSpiritNights•Commercials•AtmosphereGlobalMarketing•NationalMarketingCampaign•Marketing-–NorthAmerica–HongKong–France–Australia–Cateringtolocalneedsacrosssea’sManagementInMcDonald’sRayKroc•“Thequalityofaleaderisreflectedinthestandardstheysetforthemselves”•“Wetakethehamburgerbusinessmoreseriouslythananyoneelse”•“You'reonlyasgoodasthepeopleyouhire”•“Ifthereistimetoleanthereistimetoclean”HamburgerUniversity“McDonald’sCenterofTrainingExcellence”•CreatedbyFredTurnerandRayKrocin1961•AlllevelsofmanagersintheMcDonald’sfamilygothroughtrainingatthisfacility.“AtMcDonald’s,ourtrainingmissionistobethebesttalentdeveloperofpeoplewiththemostcommittedindividualstoQuality,Service,CleanlinessandValue(QSC&V)intheworld.Ourstrongcommitmenttothetraininganddevelopmentofourpeoplehasresultedinmany“firsts”andhonors.”ManagementContinued•HamburgerUniversityhasgivenemphasistoconsistentrestaurantoperationsprocedures,service,qualityandcleanliness.•Becauseofit’ssuccessH.U.hasbecometheglobalcenterofexcellenceforMcDonald’soperationstrainingandleadershipdevelopment.•WiththistrainingitcreatesunityfortheCEOtothelocalstoremanager,theyallhavethesamegoalsinmindwhichis…………….Beingthebestmeansprovidingoutstandingquality,service,cleanliness,andvalue,sothatwemakeeverycustomerineveryrestaurantsmile.Andbydoingthisweareourcustomers'favoriteplaceandwaytoeat.FinancialHealth•Welookedat4majoraspectsoffinancialhealthofMcDonald’sandtheircompetitors–Liquidity–Leverage–RatesofReturn–StockMarketRatios•WealsotookAltman’sZ-Scoreintoaccounttoseehowhealthythesecompanieswereduringtherecession.Liquidity•Theabilitytomeetcurrentobligations•WetookintoaccounttheCurrentRatioandtheQuickRatio.•CurrentRatio=CurrentAssets/CurrentLiabilities.•QuickRatio=(cash+marketablesecurities+netreceivables)/CurrentLiabilitiesCurrentRatioin20081.390.760.891.110.8800.511.52MCDWENBKCJACKSONCQuickRatiofor20081.340.710.89*0.970.8400.511.52MCDWENBKCJACKSONC•*Ifthecurrentratioisabove1,andthequickratioisbelow1,thenamanagermayneedtolookatthevaluationofinventoryortheinventoryturnover.Levera