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Running Head: JANE’S SITUATIONAL ANALYSIS 1
Title: Jane’s Situational Analysis
Keisha Thomas
Tracy Foote
BUS 330 Principles to Marketing
August 19, 2019
Jane’s situational analysis
Jane’s is one of the leading companies in the world in the
food production industry. It has over 40,000 retails in more than
200 countries (Atlanta, Scholarly Editions 2013). Its annual
sales range from 35 Billion dollars.
Products and services offered
Jane’s company offers the following products and services
to its customers. These products include milkshakes, yoghurts,
sandwiches, burgers, bhanjias, beverages and many more types
of foods. Its location offers these services during breakfasts,
dinners, lunch hours and night hours. These make the company
more competitive hence creating a competitive advantage
compared to other companies offering the same products and
services.
Brief History
The first restaurant was opened in the year 1930 by Jane’s
and Peter. It brought about new techniques and innovations in
the sector of the food industry. Jane's friends and relatives
provided support to Jane's leading to the establishment of more
branches. The second branch was opened in the year 1940, ten
years after the first branch. In the year 1950 Jane’s Company
was registered as a public company. Its first location
internationally in the year 1953. The company has continued to
grow since the year 1953.
Current competitors
Its largest competitors are the companies that produce
sandwiches. Their way of making sandwiches is better compared
to Jones Company. They use ingredients that are sweeter and
more flavouring. But Jones Production Company is increasing
and expanding its menu. It has put more measures in place to
improve on its production of sandwiches. It has brought in
experts to teach its chef on how to cook better sandwiches.
SWOT Analysis
This analysis is a strategic tool for planning that is used in
assessing the company strengths, opportunities, weaknesses,
threats and the company’s trend in its plan and projects
(50MINUTES.COM. 2015).
Strengths
Equity in the Brand
Jane’s Company has over 40,000 locations, its high sales
annually and high experiences in this sector have to lead to the
development of a strong Jane’s brand in food production. It also
has chefs who are very qualified in their professionals.
The cost of menus is not high
This inexpensive cost attracts more customers in the
restaurant. This leads to a rise in its economy leading to a
positive economic value.
The company have established various restaurants in different
countries and locations
These make its customers get services and products
anywhere they are. Their products are easily available to its
consumers making it more prosperous in the food industry.
Jane’s food production produces the best bhanjias
The sweetest bhanjias are found in Jane’s restaurant. These
attract more people even those who have never consumed
bhanjias want to have a taste of them.
Its recreational services
These attract more people and especially children. Kids love
places where they can enjoy themselves after having a meal.
Weaknesses
Low payment of employees
Employees in Jane’s restaurant receive a low basic salary
that cannot cater to their basic needs. There is a shortage of
employees in the company. These lead to administering more
work to the few employees found there.
Lack of satisfying its customer’s expectations
Despite Jane's restaurant having menus that are delicious,
they lack customer satisfactions. There are delays in customer
orders and some staffs lack courtesy when communicating to the
customers.
Threats
The rise in trends of eating healthier
With the continued rise in healthier eating trends, Jane’s
restaurant needs to upgrade its food. This means fortifying their
food products (Clay, 2019).
The customers in Jane’s restaurant are generally young people
Young people in the country are growing old leading to
reduction of the number of customers they receive.
Opportunities
Increased population
The population of America is increasing drastically. These
give Jane’s restaurant a promising effect that there will be no
decrease in the number of its customers.
Lack of employment to the locals
The rise of unemployment to the residents has to lead to
increased demand in fast food. These puts Jane’s restaurant at
the top because it produces and cooks fast foods.
Focus on the plan of marketing
Jane's restaurant needs to improve on its snacks like burgers
and the milkshakes. Improvement of these snacks will attract
more teenagers and youths and also more adult. For example,
they can fortify these products and also add supplements to
increase the nutritional value of these products. I also suggest
advertisements of these snacks on social platforms to encourage
more customers to consume them. These will increase the
productivity of the company leading to a better competitive
advantage.
Conclusion
Improving the milkshakes and burgers needs more funding
because fortification and supplementation need money to
implement. These will result in a high number of customers like
young adults and also children. It will lead to increased
customers during night meals since these snacks are consumed
at night. It will also lead to increasing the company name which
will be as a result of increased customers.
References
50MINUTES.COM. (2015). The SWOT Analysis: A key tool for
developing your business strategy. 50 Minutes.
Clay, C. B. (2019). Establishing Healthy Eating Habits in Early
Childhood: Lessons Learned from Early Care Professionals.
Issues in Food Production, Processing, and Preparation: 2012
Edition. (2013). Atlanta, GA: ScholarlyEditions.
Running head: MCDONALD’S MARKETING PLAN
McDonald’s Marketing Plan
Samuel A. Sample
BUS 330: Principles of Marketing
Avisha Sadeghinejad
February 16, 2016
MCDONALD’S MARKETING PLAN 2
McDonald’s Marketing Plan: Frie-day with Redbox
McDonald’s is the world’s largest fast-food chain with over
$25 billion in annual sales and
more than 35,000 retail locations in more than 100 countries
(McDonald’s Corporation, 2015).
Core Products or Services
Beyond the burgers, French fries and milkshakes that they have
been selling since its
founding, McDonald’s sells a variety of wraps, salads,
sandwiches and beverages - more than
200 items in all (The Economist, 2015). McDonald’s locations
are typically open for breakfast,
lunch, dinner, and late night dining, and many feature drive thru
service.
A Brief History
The first McDonald’s restaurant was opened in 1948 by
Richard and Maurice McDonald.
It brought production-line techniques to the burger business and
challenged the dominant carhop
drive-in business model. Ray Kroc was one of the earliest
franchisees and the key figure in the
rapid expansion of the business after he bought out the
McDonald brothers 1961. McDonald’s
became a public company in 1965 and opened its first
international location in 1967. Sales and
locations have continued to grow every year since.
Key Current Competitors
Historically, McDonald’s primary competitors were identified
to be the large fast food
burger chains like Burger King and Wendy’s. But given
McDonald’s size and the expansion of
their menu, the competitive set must be viewed more broadly to
include sandwich shops like
Subway, other fast food concepts like Chick-fil-A, more upscale
fast casual restaurants like
Panera and Chipotle, as well as coffee shop chains like
Starbucks and Dunkin’ Donuts.
SWOT Analysis
A SWOT analysis is a strategic planning tool used to assess the
strengths, weaknesses,
opportunities, threats, and trend of an organization, company,
project, plan, or venture.
MCDONALD’S MARKETING PLAN 3
Strengths
Anytime, anywhere convenience. With over 14,000 locations in
the U.S. alone, there’s a
McDonald’s within a short drive of almost everyone and most
are open from 6am to 11pm. The
number of locations also means that McDonald’s can purchase
media nationally which is more
cost efficient than buying locally.
Brand equity. As a result of its many locations, consistent
brand experiences and
hundreds of millions of dollars spent on marketing each year,
McDonald’s has developed a very
strong brand. For example, they ranked 5th on BrandZ’s 2014
most valuable global brand list
(Rooney, 2014).
The best French fries. McDonald’s French fries are universally
loved-even by
people who do not otherwise like McDonald’s food.
McDonald’s fries were voted number
one in a 2015 YouGov study (Peterson, 2015).
Kid appeal. McDonald’s is a popular destination among
younger kids. Many locations
have indoor playgrounds and there are menu items such as
Happy Meals which combine
several kid-friendly food offerings in a fun box that includes a
toy. The brand does a lot of
advertising on kid-targeted programs and Ronald McDonald is a
highly recognizable
spokesperson.
Inexpensive. With its well-known dollar menu, McDonald’s is
perceived by most
consumers as an inexpensive place to go for breakfast, lunch,
dinner, or a between-meal
snack.
Weaknesses
Menu bloat. In their attempt to compete with a wide range of
competitors, McDonald’s
menu has swollen to more than 200 items. This is driving down
operational efficiency as it
takes longer for consumers to order and longer for the food to
be prepared. Franchisees also
have to invest in additional kitchen equipment and training.
Dining environment appeal. Many McDonald’s locations are
outdated relative to chains
MCDONALD’S MARKETING PLAN 4
like Starbucks or Panera, which offer comfortable seating,
amenities like fireplaces, and greater
cleanliness. (Walton, 2015).
Low customer satisfaction. In a 2014 ACSI survey,
McDonald’s ranked last with a rating
of 71%, some 7 points below competitors like Wendy’s and
Subway (Comoletti, 2014). The rating
reflects factors such as order accuracy, food quality, staff
courtesy and menu variety.
Low employee wages. McDonald’s does not pay its restaurant
workers what most would
consider to be a “living wage” As a result, McDonald’s does not
always attract the highest
quality employees and turnover can be high, resulting in a
constant need for re-hiring and re-
training.
Threats
Healthier eating trends. While McDonald’s menu does feature
some healthier items like
salads and wraps, they are still primarily associated with
burgers, French fries, mass production,
and processed food. As such, healthier eating trends represent a
threat to McDonald’s business.
Aging of the population. The percent of population in the
United States over the age
of 65 is growing from 10% in 1970 to a projected 20% by 2030
(Ortman, Velkoff, & Hogan,
2014). The aging of the population is a threat for a business
whose core consumer franchise has
historically been families with younger children.
Rising social consciousness. While McDonald’s business or
environmental practices
have likely improved over time, the level of scrutiny
surrounding the triple-bottom line and
associated negative publicity has increased in recent years.
Popular documentaries like Super
Size Me and Fast Food Nation have not portrayed McDonald’s
food or its business practices in a
positive light.
Opportunities
Positive childhood associations. Regardless of people’s current
perceptions or level of
satisfaction, most McDonald’s consumers have fond childhood
memories associated with the
brand that can be potentially activated with the right messaging
or product offerings. This creates
MCDONALD’S MARKETING PLAN 5
an opportunity with the next generation of parents.
The prolonged U.S. economic recession. The more people’s
budgets are pinched, the
more they are apt to trade down to less expensive options like
fast food. With its well-known
dollar menu, McDonald’s can benefit from a prolonged
economic downturn.
Growth in specialty coffee. The percentage of Americans
drinking specialty coffee in the
US has more than doubled since 2009 (Ward, 2004) and
teenagers are a particularly high growth
segment. McDonald’s McCafé specialty coffee product line
should continue to benefit from this
trend.
Marketing Plan Focus
There is an opportunity to significantly grow the after-dinner
snacking business
(i.e., French fries and McCabe beverages) amongst teenagers
and young adults. This is also
a way to showcase updated facilities and amenities like Wi-Fi to
customers who may not
have visited McDonald’s recently. It is important to re-establish
brand liking with this age
group prior to them having kids of their own. This will be the
focus of the marketing plan.
Segmentation Approach
A straightforward demographic approach to segmenting the
market is appropriate for this
marketing plan. A behavioral approach based on past purchase
history as captured via use of the
McDonald’s app is also considered. However, the app was only
introduced in late 2015 and age is
not captured in the registration process (unless a social media
log-in is used). Giving the broad
appeal of the McDonald’s concept and its national footprint,
other demographics will be targeted.
Target Definition
The target for the Frie-day Night with Redbox promotion are
U.S. teens and young adults
ranging from approximately 15 to 23. To the degree media
targeting allows it, an interest in
movies, fast food restaurants and coffeehouses would represent
a further level of definition.
Positioning Statement
For teenagers and young adults, Frie-day night with Redbox is
a chance to hang with
MCDONALD’S MARKETING PLAN 6
friends and enjoy great fries, cool coffeehouse drinks, and a
movie without draining the wallet.
Marketing Mix
Marketing mix is a set of tools that firms utilizes to pursue
their goals and objectives in
satisfying the needs of their target audience.
Product
This marketing plan focuses around two McDonald’s product
lines, French fries and
McCafé beverages, which include specialty coffee drinks as
well as smoothies. The core idea is
to use the hook of America’s favorite French fries (in the red
box) to drive trial and awareness
of high margin McCafé beverages (that might otherwise be
bought at a Dunkin’ Donuts or
Starbucks) and kick-start an inexpensive, at-home social
gathering occasion involving a Redbox
movie (or video game) rental.
Price
McDonald’s everyday pricing strategy for its French fries can
be defined as competitive
relative to other fast food chains. In contrast, the pricing
strategy for the McCafé line is better
characterized as skimming relative to the specialty coffee
houses from where they are trying to
take business. For example, a large McDonald’s Mocha Frappe
is $3.80, whereas a comparable
Starbucks Mocha Frappuccino is $5.54 (Bacic Media Group,
LLC., n.d.).
As part of this marketing plan, on Friday (henceforth referred
to as Frie-day) from 7:00
p.m. to 11:00 p.m. (or closing time, if later), all customers can
upgrade from a small to a large
McCafé smoothie, frappe, or espresso drink for free when they
purchase a large order of fries.
This represents a $1 savings to the customer. The offer would
be limited to Frie-day nights (at
least initially) to create an air of urgency and specialness. The
promotional pricing represents a
deepening of the McCafé skimming strategy as well as an
example of segmented pricing as well
as peak-load (or in this case, off-peak) pricing, as this discount
is only available on Friday
nights after the peak dinner rush hour.
Promotion
MCDONALD’S MARKETING PLAN 7
In addition to the promotional pricing deal discussed above,
there would be a scratch-off
game that would also involve the use of a mobile phone
(perhaps to look up a code on a Frie-day
night microsite). The mobile component is important as we want
to reinforce the fact that
McDonald’s has Wi- Fi. Prizes would be things in red-boxes,
namely free large fries, free Redbox
movie rental nights, and a big prize like your own fully stocked
Redbox unit or a special Arch
(gift) Card that gets you free McDonald’s French fries for life.
Codes that are not instant winners
could be translated into electronic punches via the McDonald’s
app and redeemed for free fries
when a certain threshold was reached (e.g. six cards or by
spelling the word ‘Redbox’).
Redbox is selected as a promotional partner because of the link
to the McDonald’s red
french-fry box, but also because it is a good match with the
low-cost image, has widespread
distribution, high use by teens and young adults, and is related
to the late night hang-out ritual that
works well with McDonald’s. Redbox would be willing to offer
up free night promotional codes
in exchange for the publicity the promotion would bring them.
As for the media, the plan is to leverage to promote Frie-day
nights with Redbox and stay
away from traditional mass media channels, despite McDonald’s
ability to buy such media
cheaply. For this promotion to work, teenagers and young adults
will need to feel it is for them.
As the offer will be available to anyone, the “just for me”
nature of the promotion will need to be
achieved through the media channels used and the message
execution. Promotional efforts to
focus around targeting advertising on Facebook, YouTube
and/or Instagram given its younger
skew and highly visual nature.
Another effort is to explore whether there is possibly a way to
license Rebecca Black’s
“Friday Night” song (or Katy Perry’s “Last Friday Night”), as
these would be a good
conceptual fit.
In-store signage for a limited time of day and/or week
promotion can be difficult to
coordinate, but in this case, the limited presence of such
materials (e.g., a counter card or drive-thru
window sticker) would enhance the specialness of the promotion
for the target.
MCDONALD’S MARKETING PLAN 8
Place
The Frie-day night with Redbox promotion would occur at all
participating
McDonald’s locations and would relate to in-store and drive-
thru purchases on Friday nights.
Redbox movie redemptions would happen at any of Redbox’s
35,000+ U.S. locations which
are typically found near grocery and convenience stores
(Redbox Automated Retail, LLC,
n.d.).
A dedicated McDonald’s Frie-day night microsite is where
customers could be directed to
learn more about the promotion and check their prize codes.
Integration with the McDonald’s app
might be a potential means of executing the “collect x codes,
get free fries” aspect of this
promotion (and encouraging additional downloads of the
relatively new McDonald’s app).
Potential Success Metrics
There are a variety of metrics that could be potentially captured
and analyzed to measure
the effectiveness of this marketing plan. The most direct
measures would be the growth in
customer counts and dollar sales during the promotional window
versus the previous period or
year ago timeframe. As the promotion would only be offered on
Frie-day nights, sales growth on
other nights could be used for comparison. One might also
monitor increases in social media
followers, app downloads and counts of promotional codes
entered (and other promotional
microsite actions). Redbox could monitor rental counts and
number of promotional codes
redeemed to evaluate the success of their promotional
participation.
International Considerations
If this McDonald’s Frie-day night marketing plan was to be
translated for a foreign
market, it would probably be a complete start-from-scratch
scenario. First, the promotion would
need a different name as the verbal link between Frie (as in
French Fries) and Friday would not
likely exist in most languages. Secondly, a different
promotional partner would be needed as
Redbox is strictly an American concept. Finally, the focus on
coffee products might need to
change in a country like China and India where coffee
consumption versus, for example, tea is
MCDONALD’S MARKETING PLAN 9
much lower than in the U.S.
Conclusion
The Frie-day night with Redbox marketing plan should be
approved for funding because it
will succeed in leveraging America’s favorite French fries to
drive increased trial of McCafé
beverages by teens and young adults. It will also increase
consideration of McDonald’s as an
evening snack destination and help cement the brand’s
association with Friday night movie get-
togethers. It will also help build brand affinity amongst this
future generation of parents.
MCDONALD’S MARKETING PLAN 10
References
About Redbox. (n.d.). Retrieved February 7, 2016, from
http://about.redbox.com/about-redbox/
Comoletti, J. (2014, June 19). America’s favorite fast food
chains. Business Insider. Retrieved from
http://www.businessinsider.com/mcdonalds-last-in-customer-
satisfaction-2014-6
McDonald’s prices. (n.d.). Retrieved February 1, 2016, from
http://www.fastfoodmenuprices.com/mcdonaldsprices/
McDonald’s Corporation. (2015). 2014 annual report. Retrieved
from
http://corporate.mcdonalds.com/content/dam/AboutMcDonalds/I
nvestors/McDonalds2014Annual
Report.PDF
Ortman, J. M., Velkoff, V. A., & Hogan, H. (2014). An aging
nation: The older population in the United
States [Report]. Retrieved from
https://www.census.gov/prod/2014pubs/p25-1140.pdf
Peterson, H. (2015, July 13). The best fast food french fries in
America. Business Insider. Retrieved from
http://www.businessinsider.com/the-best-french-fries-in-
america-2015-7
Rooney, J. (2014, May 20). Google beats Apple as BrandZ most
valuable global brand. Forbes. Retrieved
from
https://www.forbes.com/sites/jenniferrooney/2014/05/20/google
-beats-apple-as-brandz- most-
valuable-global-brand/#78acff8b268d
Starbucks prices. (n.d.). Retrieved February 7, 2016, from
http://www.fastfoodmenuprices.com/starbucksprices/
The Economist. (2015, January 8). McDonald’s: When the chips
are down. Retrieved from
https://www.economist.com/news/business/21638115-after-
long-run-success-worlds-largest-fast-
food-chain-flounderingand-activist
Walton. (2015). McDonald marketing plan 1 [Infogram].
Retrieved from https://infogram.com/marketing-
plan-tutorialoutlet-dot-com-1gqo2qnlo48w278
Ward, H. (2014, December 10). Specialty coffee consumption:
A look at the numbers. Retrieved from
http://www.scanews.coffee/2014/12/10/specialty-coffee-
consumption-a-look-at-the-numbers/
http://about.redbox.com/about-redbox/
http://www.businessinsider.com/mcdonalds-last-in-customer-
satisfaction-2014-6
http://www.fastfoodmenuprices.com/mcdonaldsprices/
http://corporate.mcdonalds.com/content/dam/AboutMcDonalds/I
nvestors/McDonalds2014Annual
http://www.census.gov/prod/2014pubs/p25-1140.pdf
http://www.businessinsider.com/the-best-french-fries-in-
america-2015-7
http://www.businessinsider.com/the-best-french-fries-in-
america-2015-7
https://www.forbes.com/sites/jenniferrooney/2014/05/20/google
-beats-apple-as-brandz-%20most-valuable-global-
brand/#78acff8b268d
https://www.forbes.com/sites/jenniferrooney/2014/05/20/google
-beats-apple-as-brandz-%20most-valuable-global-
brand/#78acff8b268d
http://www.fastfoodmenuprices.com/starbucksprices/
https://www.economist.com/news/business/21638115-after-
long-run-success-worlds-largest-fast-food-chain-
flounderingand-activist
https://www.economist.com/news/business/21638115-after-
long-run-success-worlds-largest-fast-food-chain-
flounderingand-activist
https://infogram.com/marketing-plan-tutorialoutlet-dot-com-
1gqo2qnlo48w278
https://infogram.com/marketing-plan-tutorialoutlet-dot-com-
1gqo2qnlo48w278
http://www.scanews.coffee/2014/12/10/specialty-coffee-
consumption-a-look-at-the-numbers/McDonald’s Marketing
Plan: Frie-day with RedboxCore Products or ServicesA Brief
HistoryKey Current CompetitorsSWOT AnalysisMarketing Plan
FocusSegmentation ApproachTarget DefinitionPositioning
StatementMarketing MixProductPricePromotionPlacePotential
Success MetricsInternational ConsiderationsConclusion

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  • 1. Running Head: JANE’S SITUATIONAL ANALYSIS 1 Title: Jane’s Situational Analysis Keisha Thomas Tracy Foote BUS 330 Principles to Marketing August 19, 2019 Jane’s situational analysis Jane’s is one of the leading companies in the world in the food production industry. It has over 40,000 retails in more than 200 countries (Atlanta, Scholarly Editions 2013). Its annual sales range from 35 Billion dollars. Products and services offered Jane’s company offers the following products and services
  • 2. to its customers. These products include milkshakes, yoghurts, sandwiches, burgers, bhanjias, beverages and many more types of foods. Its location offers these services during breakfasts, dinners, lunch hours and night hours. These make the company more competitive hence creating a competitive advantage compared to other companies offering the same products and services. Brief History The first restaurant was opened in the year 1930 by Jane’s and Peter. It brought about new techniques and innovations in the sector of the food industry. Jane's friends and relatives provided support to Jane's leading to the establishment of more branches. The second branch was opened in the year 1940, ten years after the first branch. In the year 1950 Jane’s Company was registered as a public company. Its first location internationally in the year 1953. The company has continued to grow since the year 1953. Current competitors Its largest competitors are the companies that produce sandwiches. Their way of making sandwiches is better compared to Jones Company. They use ingredients that are sweeter and more flavouring. But Jones Production Company is increasing and expanding its menu. It has put more measures in place to improve on its production of sandwiches. It has brought in experts to teach its chef on how to cook better sandwiches. SWOT Analysis This analysis is a strategic tool for planning that is used in assessing the company strengths, opportunities, weaknesses, threats and the company’s trend in its plan and projects (50MINUTES.COM. 2015). Strengths Equity in the Brand Jane’s Company has over 40,000 locations, its high sales annually and high experiences in this sector have to lead to the development of a strong Jane’s brand in food production. It also has chefs who are very qualified in their professionals.
  • 3. The cost of menus is not high This inexpensive cost attracts more customers in the restaurant. This leads to a rise in its economy leading to a positive economic value. The company have established various restaurants in different countries and locations These make its customers get services and products anywhere they are. Their products are easily available to its consumers making it more prosperous in the food industry. Jane’s food production produces the best bhanjias The sweetest bhanjias are found in Jane’s restaurant. These attract more people even those who have never consumed bhanjias want to have a taste of them. Its recreational services These attract more people and especially children. Kids love places where they can enjoy themselves after having a meal. Weaknesses Low payment of employees Employees in Jane’s restaurant receive a low basic salary that cannot cater to their basic needs. There is a shortage of employees in the company. These lead to administering more work to the few employees found there. Lack of satisfying its customer’s expectations Despite Jane's restaurant having menus that are delicious, they lack customer satisfactions. There are delays in customer orders and some staffs lack courtesy when communicating to the customers. Threats The rise in trends of eating healthier With the continued rise in healthier eating trends, Jane’s restaurant needs to upgrade its food. This means fortifying their food products (Clay, 2019). The customers in Jane’s restaurant are generally young people Young people in the country are growing old leading to reduction of the number of customers they receive. Opportunities
  • 4. Increased population The population of America is increasing drastically. These give Jane’s restaurant a promising effect that there will be no decrease in the number of its customers. Lack of employment to the locals The rise of unemployment to the residents has to lead to increased demand in fast food. These puts Jane’s restaurant at the top because it produces and cooks fast foods. Focus on the plan of marketing Jane's restaurant needs to improve on its snacks like burgers and the milkshakes. Improvement of these snacks will attract more teenagers and youths and also more adult. For example, they can fortify these products and also add supplements to increase the nutritional value of these products. I also suggest advertisements of these snacks on social platforms to encourage more customers to consume them. These will increase the productivity of the company leading to a better competitive advantage. Conclusion Improving the milkshakes and burgers needs more funding because fortification and supplementation need money to implement. These will result in a high number of customers like young adults and also children. It will lead to increased customers during night meals since these snacks are consumed at night. It will also lead to increasing the company name which will be as a result of increased customers.
  • 5. References 50MINUTES.COM. (2015). The SWOT Analysis: A key tool for developing your business strategy. 50 Minutes. Clay, C. B. (2019). Establishing Healthy Eating Habits in Early Childhood: Lessons Learned from Early Care Professionals. Issues in Food Production, Processing, and Preparation: 2012 Edition. (2013). Atlanta, GA: ScholarlyEditions. Running head: MCDONALD’S MARKETING PLAN McDonald’s Marketing Plan Samuel A. Sample BUS 330: Principles of Marketing Avisha Sadeghinejad February 16, 2016
  • 6. MCDONALD’S MARKETING PLAN 2 McDonald’s Marketing Plan: Frie-day with Redbox McDonald’s is the world’s largest fast-food chain with over $25 billion in annual sales and more than 35,000 retail locations in more than 100 countries (McDonald’s Corporation, 2015). Core Products or Services Beyond the burgers, French fries and milkshakes that they have been selling since its founding, McDonald’s sells a variety of wraps, salads, sandwiches and beverages - more than 200 items in all (The Economist, 2015). McDonald’s locations are typically open for breakfast, lunch, dinner, and late night dining, and many feature drive thru service. A Brief History The first McDonald’s restaurant was opened in 1948 by Richard and Maurice McDonald. It brought production-line techniques to the burger business and challenged the dominant carhop drive-in business model. Ray Kroc was one of the earliest
  • 7. franchisees and the key figure in the rapid expansion of the business after he bought out the McDonald brothers 1961. McDonald’s became a public company in 1965 and opened its first international location in 1967. Sales and locations have continued to grow every year since. Key Current Competitors Historically, McDonald’s primary competitors were identified to be the large fast food burger chains like Burger King and Wendy’s. But given McDonald’s size and the expansion of their menu, the competitive set must be viewed more broadly to include sandwich shops like Subway, other fast food concepts like Chick-fil-A, more upscale fast casual restaurants like Panera and Chipotle, as well as coffee shop chains like Starbucks and Dunkin’ Donuts. SWOT Analysis A SWOT analysis is a strategic planning tool used to assess the strengths, weaknesses, opportunities, threats, and trend of an organization, company, project, plan, or venture.
  • 8. MCDONALD’S MARKETING PLAN 3 Strengths Anytime, anywhere convenience. With over 14,000 locations in the U.S. alone, there’s a McDonald’s within a short drive of almost everyone and most are open from 6am to 11pm. The number of locations also means that McDonald’s can purchase media nationally which is more cost efficient than buying locally. Brand equity. As a result of its many locations, consistent brand experiences and hundreds of millions of dollars spent on marketing each year, McDonald’s has developed a very strong brand. For example, they ranked 5th on BrandZ’s 2014 most valuable global brand list (Rooney, 2014). The best French fries. McDonald’s French fries are universally loved-even by people who do not otherwise like McDonald’s food. McDonald’s fries were voted number one in a 2015 YouGov study (Peterson, 2015). Kid appeal. McDonald’s is a popular destination among
  • 9. younger kids. Many locations have indoor playgrounds and there are menu items such as Happy Meals which combine several kid-friendly food offerings in a fun box that includes a toy. The brand does a lot of advertising on kid-targeted programs and Ronald McDonald is a highly recognizable spokesperson. Inexpensive. With its well-known dollar menu, McDonald’s is perceived by most consumers as an inexpensive place to go for breakfast, lunch, dinner, or a between-meal snack. Weaknesses Menu bloat. In their attempt to compete with a wide range of competitors, McDonald’s menu has swollen to more than 200 items. This is driving down operational efficiency as it takes longer for consumers to order and longer for the food to be prepared. Franchisees also have to invest in additional kitchen equipment and training. Dining environment appeal. Many McDonald’s locations are outdated relative to chains
  • 10. MCDONALD’S MARKETING PLAN 4 like Starbucks or Panera, which offer comfortable seating, amenities like fireplaces, and greater cleanliness. (Walton, 2015). Low customer satisfaction. In a 2014 ACSI survey, McDonald’s ranked last with a rating of 71%, some 7 points below competitors like Wendy’s and Subway (Comoletti, 2014). The rating reflects factors such as order accuracy, food quality, staff courtesy and menu variety. Low employee wages. McDonald’s does not pay its restaurant workers what most would consider to be a “living wage” As a result, McDonald’s does not always attract the highest quality employees and turnover can be high, resulting in a constant need for re-hiring and re- training. Threats Healthier eating trends. While McDonald’s menu does feature some healthier items like salads and wraps, they are still primarily associated with
  • 11. burgers, French fries, mass production, and processed food. As such, healthier eating trends represent a threat to McDonald’s business. Aging of the population. The percent of population in the United States over the age of 65 is growing from 10% in 1970 to a projected 20% by 2030 (Ortman, Velkoff, & Hogan, 2014). The aging of the population is a threat for a business whose core consumer franchise has historically been families with younger children. Rising social consciousness. While McDonald’s business or environmental practices have likely improved over time, the level of scrutiny surrounding the triple-bottom line and associated negative publicity has increased in recent years. Popular documentaries like Super Size Me and Fast Food Nation have not portrayed McDonald’s food or its business practices in a positive light. Opportunities Positive childhood associations. Regardless of people’s current perceptions or level of satisfaction, most McDonald’s consumers have fond childhood
  • 12. memories associated with the brand that can be potentially activated with the right messaging or product offerings. This creates MCDONALD’S MARKETING PLAN 5 an opportunity with the next generation of parents. The prolonged U.S. economic recession. The more people’s budgets are pinched, the more they are apt to trade down to less expensive options like fast food. With its well-known dollar menu, McDonald’s can benefit from a prolonged economic downturn. Growth in specialty coffee. The percentage of Americans drinking specialty coffee in the US has more than doubled since 2009 (Ward, 2004) and teenagers are a particularly high growth segment. McDonald’s McCafé specialty coffee product line should continue to benefit from this trend. Marketing Plan Focus There is an opportunity to significantly grow the after-dinner snacking business
  • 13. (i.e., French fries and McCabe beverages) amongst teenagers and young adults. This is also a way to showcase updated facilities and amenities like Wi-Fi to customers who may not have visited McDonald’s recently. It is important to re-establish brand liking with this age group prior to them having kids of their own. This will be the focus of the marketing plan. Segmentation Approach A straightforward demographic approach to segmenting the market is appropriate for this marketing plan. A behavioral approach based on past purchase history as captured via use of the McDonald’s app is also considered. However, the app was only introduced in late 2015 and age is not captured in the registration process (unless a social media log-in is used). Giving the broad appeal of the McDonald’s concept and its national footprint, other demographics will be targeted. Target Definition The target for the Frie-day Night with Redbox promotion are U.S. teens and young adults ranging from approximately 15 to 23. To the degree media targeting allows it, an interest in
  • 14. movies, fast food restaurants and coffeehouses would represent a further level of definition. Positioning Statement For teenagers and young adults, Frie-day night with Redbox is a chance to hang with MCDONALD’S MARKETING PLAN 6 friends and enjoy great fries, cool coffeehouse drinks, and a movie without draining the wallet. Marketing Mix Marketing mix is a set of tools that firms utilizes to pursue their goals and objectives in satisfying the needs of their target audience. Product This marketing plan focuses around two McDonald’s product lines, French fries and McCafé beverages, which include specialty coffee drinks as well as smoothies. The core idea is to use the hook of America’s favorite French fries (in the red box) to drive trial and awareness of high margin McCafé beverages (that might otherwise be bought at a Dunkin’ Donuts or
  • 15. Starbucks) and kick-start an inexpensive, at-home social gathering occasion involving a Redbox movie (or video game) rental. Price McDonald’s everyday pricing strategy for its French fries can be defined as competitive relative to other fast food chains. In contrast, the pricing strategy for the McCafé line is better characterized as skimming relative to the specialty coffee houses from where they are trying to take business. For example, a large McDonald’s Mocha Frappe is $3.80, whereas a comparable Starbucks Mocha Frappuccino is $5.54 (Bacic Media Group, LLC., n.d.). As part of this marketing plan, on Friday (henceforth referred to as Frie-day) from 7:00 p.m. to 11:00 p.m. (or closing time, if later), all customers can upgrade from a small to a large McCafé smoothie, frappe, or espresso drink for free when they purchase a large order of fries. This represents a $1 savings to the customer. The offer would be limited to Frie-day nights (at least initially) to create an air of urgency and specialness. The
  • 16. promotional pricing represents a deepening of the McCafé skimming strategy as well as an example of segmented pricing as well as peak-load (or in this case, off-peak) pricing, as this discount is only available on Friday nights after the peak dinner rush hour. Promotion MCDONALD’S MARKETING PLAN 7 In addition to the promotional pricing deal discussed above, there would be a scratch-off game that would also involve the use of a mobile phone (perhaps to look up a code on a Frie-day night microsite). The mobile component is important as we want to reinforce the fact that McDonald’s has Wi- Fi. Prizes would be things in red-boxes, namely free large fries, free Redbox movie rental nights, and a big prize like your own fully stocked Redbox unit or a special Arch (gift) Card that gets you free McDonald’s French fries for life. Codes that are not instant winners could be translated into electronic punches via the McDonald’s app and redeemed for free fries
  • 17. when a certain threshold was reached (e.g. six cards or by spelling the word ‘Redbox’). Redbox is selected as a promotional partner because of the link to the McDonald’s red french-fry box, but also because it is a good match with the low-cost image, has widespread distribution, high use by teens and young adults, and is related to the late night hang-out ritual that works well with McDonald’s. Redbox would be willing to offer up free night promotional codes in exchange for the publicity the promotion would bring them. As for the media, the plan is to leverage to promote Frie-day nights with Redbox and stay away from traditional mass media channels, despite McDonald’s ability to buy such media cheaply. For this promotion to work, teenagers and young adults will need to feel it is for them. As the offer will be available to anyone, the “just for me” nature of the promotion will need to be achieved through the media channels used and the message execution. Promotional efforts to focus around targeting advertising on Facebook, YouTube and/or Instagram given its younger
  • 18. skew and highly visual nature. Another effort is to explore whether there is possibly a way to license Rebecca Black’s “Friday Night” song (or Katy Perry’s “Last Friday Night”), as these would be a good conceptual fit. In-store signage for a limited time of day and/or week promotion can be difficult to coordinate, but in this case, the limited presence of such materials (e.g., a counter card or drive-thru window sticker) would enhance the specialness of the promotion for the target. MCDONALD’S MARKETING PLAN 8 Place The Frie-day night with Redbox promotion would occur at all participating McDonald’s locations and would relate to in-store and drive- thru purchases on Friday nights. Redbox movie redemptions would happen at any of Redbox’s 35,000+ U.S. locations which are typically found near grocery and convenience stores (Redbox Automated Retail, LLC,
  • 19. n.d.). A dedicated McDonald’s Frie-day night microsite is where customers could be directed to learn more about the promotion and check their prize codes. Integration with the McDonald’s app might be a potential means of executing the “collect x codes, get free fries” aspect of this promotion (and encouraging additional downloads of the relatively new McDonald’s app). Potential Success Metrics There are a variety of metrics that could be potentially captured and analyzed to measure the effectiveness of this marketing plan. The most direct measures would be the growth in customer counts and dollar sales during the promotional window versus the previous period or year ago timeframe. As the promotion would only be offered on Frie-day nights, sales growth on other nights could be used for comparison. One might also monitor increases in social media followers, app downloads and counts of promotional codes entered (and other promotional microsite actions). Redbox could monitor rental counts and
  • 20. number of promotional codes redeemed to evaluate the success of their promotional participation. International Considerations If this McDonald’s Frie-day night marketing plan was to be translated for a foreign market, it would probably be a complete start-from-scratch scenario. First, the promotion would need a different name as the verbal link between Frie (as in French Fries) and Friday would not likely exist in most languages. Secondly, a different promotional partner would be needed as Redbox is strictly an American concept. Finally, the focus on coffee products might need to change in a country like China and India where coffee consumption versus, for example, tea is MCDONALD’S MARKETING PLAN 9 much lower than in the U.S. Conclusion The Frie-day night with Redbox marketing plan should be approved for funding because it
  • 21. will succeed in leveraging America’s favorite French fries to drive increased trial of McCafé beverages by teens and young adults. It will also increase consideration of McDonald’s as an evening snack destination and help cement the brand’s association with Friday night movie get- togethers. It will also help build brand affinity amongst this future generation of parents. MCDONALD’S MARKETING PLAN 10 References About Redbox. (n.d.). Retrieved February 7, 2016, from http://about.redbox.com/about-redbox/ Comoletti, J. (2014, June 19). America’s favorite fast food chains. Business Insider. Retrieved from http://www.businessinsider.com/mcdonalds-last-in-customer- satisfaction-2014-6 McDonald’s prices. (n.d.). Retrieved February 1, 2016, from http://www.fastfoodmenuprices.com/mcdonaldsprices/ McDonald’s Corporation. (2015). 2014 annual report. Retrieved from http://corporate.mcdonalds.com/content/dam/AboutMcDonalds/I nvestors/McDonalds2014Annual
  • 22. Report.PDF Ortman, J. M., Velkoff, V. A., & Hogan, H. (2014). An aging nation: The older population in the United States [Report]. Retrieved from https://www.census.gov/prod/2014pubs/p25-1140.pdf Peterson, H. (2015, July 13). The best fast food french fries in America. Business Insider. Retrieved from http://www.businessinsider.com/the-best-french-fries-in- america-2015-7 Rooney, J. (2014, May 20). Google beats Apple as BrandZ most valuable global brand. Forbes. Retrieved from https://www.forbes.com/sites/jenniferrooney/2014/05/20/google -beats-apple-as-brandz- most- valuable-global-brand/#78acff8b268d Starbucks prices. (n.d.). Retrieved February 7, 2016, from http://www.fastfoodmenuprices.com/starbucksprices/ The Economist. (2015, January 8). McDonald’s: When the chips are down. Retrieved from https://www.economist.com/news/business/21638115-after- long-run-success-worlds-largest-fast- food-chain-flounderingand-activist
  • 23. Walton. (2015). McDonald marketing plan 1 [Infogram]. Retrieved from https://infogram.com/marketing- plan-tutorialoutlet-dot-com-1gqo2qnlo48w278 Ward, H. (2014, December 10). Specialty coffee consumption: A look at the numbers. Retrieved from http://www.scanews.coffee/2014/12/10/specialty-coffee- consumption-a-look-at-the-numbers/ http://about.redbox.com/about-redbox/ http://www.businessinsider.com/mcdonalds-last-in-customer- satisfaction-2014-6 http://www.fastfoodmenuprices.com/mcdonaldsprices/ http://corporate.mcdonalds.com/content/dam/AboutMcDonalds/I nvestors/McDonalds2014Annual http://www.census.gov/prod/2014pubs/p25-1140.pdf http://www.businessinsider.com/the-best-french-fries-in- america-2015-7 http://www.businessinsider.com/the-best-french-fries-in- america-2015-7 https://www.forbes.com/sites/jenniferrooney/2014/05/20/google -beats-apple-as-brandz-%20most-valuable-global- brand/#78acff8b268d https://www.forbes.com/sites/jenniferrooney/2014/05/20/google -beats-apple-as-brandz-%20most-valuable-global- brand/#78acff8b268d http://www.fastfoodmenuprices.com/starbucksprices/ https://www.economist.com/news/business/21638115-after- long-run-success-worlds-largest-fast-food-chain- flounderingand-activist https://www.economist.com/news/business/21638115-after- long-run-success-worlds-largest-fast-food-chain- flounderingand-activist https://infogram.com/marketing-plan-tutorialoutlet-dot-com-
  • 24. 1gqo2qnlo48w278 https://infogram.com/marketing-plan-tutorialoutlet-dot-com- 1gqo2qnlo48w278 http://www.scanews.coffee/2014/12/10/specialty-coffee- consumption-a-look-at-the-numbers/McDonald’s Marketing Plan: Frie-day with RedboxCore Products or ServicesA Brief HistoryKey Current CompetitorsSWOT AnalysisMarketing Plan FocusSegmentation ApproachTarget DefinitionPositioning StatementMarketing MixProductPricePromotionPlacePotential Success MetricsInternational ConsiderationsConclusion