McDonald’s is one of the largest chains of hamburger fast food restaurants in the world. Since its foundation in the year 1940, McDonald’s has successfully increased its prominence globally. For more visit - https://myassignmenthelp.com/case-study/mcdonalds-pestle-analysis-marketing-case-study.html

1. Marketing Mix of McDonald’s
4P’s & 5P’s

2. Introduction
• McDonald’s is one of the largest chains of hamburger fast food restaurants
in the world. Since its foundation in the year 1940, McDonald’s has
successfully increased its prominence globally.
• It has been possible due to the successful marketing strategies used and
the consistent introduction of new variations in the menu worldwide.
• The marketing mix is a business tool which every marketer uses to
determine the feasibility and sustenance of a product by the use of
defined strategies and goals.

3. Introduction
• The marketers used the traditional principle of McCarthy’s 4Ps but
nowadays all the organizations research about the 5Ps of marketing which
are:
- Product
- Price
- Place
- Promotion and
- People
Marketing
Mix
Product Price Place Promotion People

4. PRODUCT
• McDonald’s places primary focus on developing their menu and upgrading
it from time to time.
• It is important to monitor the customer’s preferences regularly as they
tend to change over time.
• Accordingly, McDonald’s introduces new items in their list and phases out
those which do not receive appreciation or loses its prominence with
time. It follows the life cycle of every product illustrated below:
0
5
10
15
20
25
0 5 10 15 20
Product Life Cycle
Y-Values
introduction
growth
maturity
decline
[Source: AboutMcDonalds.com]

5. PRODUCT
• Here is a short timeline of the introduction of some celebrated products
by McDonald’s.
Year of Introduction Item
1963 Filet-O-Fish
1968 Big Mac and Hot Apple Pie
1973 Egg McMuffin
1977 Breakfast Menu
1979 Happy Meals
1983 Chicken Nuggets
1987 Salads
1998 McFlurry Desserts
2000 Chicken McGrill
2001 Big N Tasty
2010 McCafe Real Fruit Smoothies and Frappes
[Source: AboutMcDonalds.com]

6. PRODUCT
Precisely, the menu of McDonald’s can be grouped into the following
categories:
• Burgers and Sandwiches
• Chicken and Fish
• Breakfast
• Salads
• Snacks and Sides
• Beverages
• McCafe
• Desserts and Shakes
• Meal Bundles

7. PRICE
• For every company, the customer’s perception of value for individual
products is an important determinant of the price charged by them.
McDonald’s is no exception.
• A high priced item will discourage the customer to buy it, an extremely
low cost item will make them feel that the quality of the product has been
compromised.
• Accordingly, McDonald’s decides the prices for its products with are called
Value-based Pricing.
• It generally emphasizes on the product benefits perceived by the
customer irrespective of the exact cost of developing the product.

8. PRICE
• It generally emphasizes on the product benefits perceived by the
customer irrespective of the exact cost of developing the product.
1. Price Bundling
• Price bundling is a famous strategy used by the companies where the
company bundle many items together and then offers the entire bundle at
a definite cost.
• The final price of the bundle is lower than if the items of the bundle are
bought individually. The all-inclusive reduced price attracts customers.

9. PRICE
2. Psychological Pricing
• It is also a popular pricing strategy which psychologically influences the
customers.
• It reduces the prices of the products strategically to give a boost in the
overall sales.
• Retail prices are often expressed in odd prices a little lower than the
actual price (for example - $1.99 in place of $2).
• Some of the factors that McDonald’s take into consideration while fixing
up the prices of its items are as follows:
- Objective
- Demand
- Estimate costs and
- Competitors price (if any)

10. PLACE
• Place not only concerns the physical location of the organization and its
outlets or its distribution points but it also encompasses its management and
range of processes which brings the products to the potential customers.
• According to the latest data, McDonald’s has its prominent presence in more
than 119 countries with more than 36,000 outlets.
• As McDonald’s offers only food items which are perishable, the distribution
chain becomes very important for its survival.
• In USA alone, nearly half of the total outlets in the country are located within a
distance of three minutes drive.
• The number of McDonald’s restaurants has increased rapidly since then. Even,
the data of the last five years suggest that McDonald’s is increasing its outlets
globally.

11. PLACE
• The number of McDonald’s restaurants has increased rapidly since then.
Even, the data of the last five years suggest that McDonald’s is increasing
its outlets globally.
30000
31000
32000
33000
34000
35000
36000
37000
2010 2011 2012 2013 2014
Number of McDonald’s restaurants
Number of restaurants
[Source: en.wikipedia.org]

12. PLACE
• Accordingly, the employees of McDonald’s emphasize on the following
factors:
- Hygienic environment
- Soothing ambiance
- Prompt services
• In the last one decade, McDonald’s has taken a number of steps to make it
services more comprehensive and effective for the customers. They are as
follows:
- Kiosks
- Mobile App and Home Delivery

13. PROMOTION
• Even a person who has never visited or bought anything from McDonald’s
restaurants and outlets has heard the international slogan, ‘I’m loving it!’
• Though McDonald’s enjoys a comfortable position in the fast food
industry, still it heavily promotes its items and products. It does not
depend on any one form of promotion but effectively uses all the
mediums.
• In the age of globalization where almost every second person carries a
smartphone, it has become important to increase promotion to boost
sales and increase profitability and credentials.

14. PROMOTION
• Advertising
McDonald’s advertisements form the most common part of its advertising
strategy. It uses all forms of media to reach the customers.
2.63
2.64
2.65
2.66
2.67
2.68
2.69
2.7
2.71
2.72
2.73
2011 2012 2013
Spending in billion (USD)
Spending in billion (USD)
[Source: statista.com]

15. PROMOTION
• Sales Promotion
 During festivals in the different countries, launch of an outlet and other
occasions, McDonald’s provides discounts and freebies to the customers on
certain or all items.
• Public Relations
 McDonald’s also provides significant emphasis on the public relations which
gets reflected from each of their employees working in the company.
• Sponsorship
 McDonald’s also invests heavily in sponsorship. This sponsorship not only have
a positive impact on the sales but it also improves the brand image of
McDonald’s which is already known globally.

16. People
• There are two main components behind the success of McDonald’s :
- Employees
- Customers
• It believes in the fact that happy employees can only make a customer
happy with their service.
• If a customer encounters a bad-tempered employee or a waiter in any
outlet or restaurant of McDonald’s, the whole experience will be bad and
the respective customer may not feel interested again to visit McDonald’s.

17. People
• McDonald’s constantly hires, trains and motivates its employees so that
they can cater the best possible service to the customers.
• Some of the initiatives are as follows:
- Proper Uniform and Training
- Hiring Only Native People
- Prioritizing Hygiene
- Customer Service

18. People
McDonald’s provide the maximum importance to the customers. Hence, as a result,
the annual revenue of McDonald’s increases every year, though it experienced a
decrease in total revenue in the year 2014. It is clearly depicted in the below figure:
22
23
24
25
26
27
28
29
2010 2011 2012 2013 2014
Revenue in billion USD ($)
Revenue in billion USD ($)
[Source: statista.com]

19. Graphical Analysis of McDonald’s
Marketing Mix
PRODUCT
• Type: Fast Food
• Varieties: Burgers, Sandwiches, Salads, Snacks, Desserts, Shakes, Beverages, Chicken & Fish
• Package: Boxer, Take Away, Designer Packaging, Self Service and Home Delivery
• Quantity: Breakfast, Full Meal, Snacks, Value Meals, Kids Meal
PRICE
• Direct Price Discrimination Strategy (Prices differs with country)
• Prices of a Big Mac (Nov, 2015):
• Switzerland- $6.82
• USA- $4.79
• India- $1.83
PLACE
• Global Presence (119 countires)
• Available through:
• Restaurants
• Franchise Centers
• Kiosks

20. Graphical Analysis of McDonald’s
Marketing Mix
PROMOTION
•Advertising (Newspapers, Magazines, Internet etc)
• Sales Promotion (Discounts/ Gifts)
• Public Relations
• Sponsorship
• Philanthropy
PEOPLE
• Steve Easterbrook (CEO and Chairman)
• 1.9 employees worldwide
• Serves more than 46 millions customers every day
• Profit around $ 5.5 billion (2012 data)

21. Conclusion
• McDonald’s takes a comprehensive approach where marketing strategies are
concerned to ensure their overall growth and development.
• The basic features of this strategy involve market research, innovative ideas,
planning, organizing and acting according to customer needs and views.
• The marketing mix of McDonald’s clearly reciprocated these set of strategies.
• After analyzing the marketing mix of McDonald’s, it can be clearly stated that the
company is “glocal”- the amalgamation of globalization and internationalization.
• Due to this approach, it has been very successful in making their brand widely
popular throughout the globe.
• It serves about 46 million customers every day which will increase with time if they
can continue their innovation and adaptability with the changing needs of the
customers.