Team L Marketing Plan Final Final Draft (1)

McDonald’s Delivery Service
Team L
Sarah Phipps
Lea Ann Pauli
Catherine Pillar
Oscar Mitchell
MKTG 3361_001
04/22/2014
Professor: Lisa Siegal

Table of Contents
1. Company Description…………………………………………………………………….1
2. Strategic Focus and Plan………………………………………………………….……....1
Mission Statement…………………………………………………….…………..2
Goals……................................................................................................................2
Nonfinancial Goals………………………………………………………..2
Financial Goals……………………………………………………………2
Core Competency and Sustainable Competitive Advantage…………………...…2
3. Situation Analysis…………………………………………………………………………3
SWOT Analysis………………………………………………………………...…3
Industry Analysis…………………………………………………………...……..4
Competitor Analysis……………………………………………………………....4
Company Analysis……………………………………………………………..….5
Customer Analysis……………………………………………………...…………5
4. Market Product Focus…...………...………………………………………………..……..6
Marketing and Project Objectives…………………………………………………6
Target Markets…………………………………………………………………….7
Points of Difference……………………………………………………………….8
Positioning………………………………………………………………….....…..8
5. Marketing Program…………………………………………………………………..……9
Product…………………………………………………………………………….9
Price Strategy……………………………………………………………..……….9
Place Distribution Strategy………………………………………………………10
Promotion Strategy………………………………………………………………10
6. Financial Data and Projections…………………………………………………………..11
Five-year Projection…………………………………………………………...…12
7. Implementation Plan……………………………………………………………….…….13
Rollout Schedule for the First 5 Years…………………………………..……….14
8. Evaluation……………………………………………………………………..…………15

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1. Company Description
McDonald’s was originally founded in 1948 by brothers Dick and Mac McDonald as a
self-service, drive-in burger joint in San Bernardino, California. The main staple of the small 9
item menu was the 15 cent hamburger. In 1954 Ray Kroc discovered McDonald’s and decided to
make his future in hamburgers, taking the McDonald brothers up on their idea of a franchise. He
bought the Mc Donald’s name, and opened his first location
in Des Plaines, Illinois in April of 1955. This building
displays the architects “golden arches” that remain the
symbol of McDonald’s to this day. Mc Donald’s continued
to grow rapidly, opening 700 locations by 1965. In 1966
McDonald’s introduced their iconic figure, whom all children know and love, Ronald
McDonald. Making his debut by appearing in television commercials and the Macy’s
Thanksgiving Day parade, Ronald was an immediate sensation. Another big year was 1975 with
the introduction of the breakfast Egg McMuffin and the first drive-thru. And the ever famous
Happy Meal was introduced in 1979. By 1981 McDonald’s could be found in 32 countries. Over
the years McDonald’s has taken the opportunity of coining catchy phrases/tunes in their
marketing themes. For example, the 1995 theme “Have you had your break today?” and “Did
somebody say McDonald’s” from 1997, or even the phrase we are familiar with today,”I’m lovin
it”. McDonald’s remains a very successful company which currently operates in 119 countries.
2. Strategic Focus and Plan
This section covers three main categories of McDonald’s overall strategic focus and plan:
Mission, Goals, and Core Competency and Sustainable Competitive Advantage.
Photo courtesy ofpanoramio.com

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Mission
“McDonald's brand mission is to be our customers' favorite place and way to eat and
drink. Our worldwide operations are aligned around a global strategy called the Plan to
Win, which center on an exceptional customer experience – People, Products, Place,
Price and Promotion. We are committed to continuously improving our operations and
enhancing our customers' experience.” (aboutmcdonalds.com, 2014)
Goals
Within the next five years McDonald’s would like to achieve the following goals.
 Nonfinancial goals
1) Continue to build the McDonald’s brand by focusing on customers needs.
2) Insure that as the brand grows the company is gaining long-term repeat customers.
3) Continue to introduce new items as well as phase out old items.
4) Promote and insure a menu, which contains an array of healthy alternatives.
5) Introduce delivery service in several metropolitan areas with the intent to eventually
offer delivery in 85% of McDonald’s restaurants.
 Financial goals
1) A system wide sales growth of 3-5% in addition to a 2% per year increase in revenue
due to delivery implementation.
2) Operating income growth of 6-7%
3) Return on incremental invested capital in the high teens. (news.mcdonalds.com)
Core Competency and Sustainable Competitive Advantage
Part of McDonald’s core competency is the convienence they provide to customers. This
convienence will only increase with the inclusion of the delivery service. Also, the quality and

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volume of production and the speed at which the product is delivered adds to McDonald’s core
compency level. They are able to provide a quality product in both terms of flavor and price.
“We always strive to be better tomorrow than we are today. This, more than anything,
speaks to who McDonald's is as a company. The overarching goal of our sustainability
efforts is focused on continuous improvement through our five focus areas: Nutrition &
Well-Being, Sustainable Supply Chain, Environmental Responsibility, Employee
Experience, and Community.” (aboutmcdonalds.com, 2014)
3. Situation Analysis
SWOT Analysis
Strengths
1. Largest fast food market share in the
world
2. Brand recognition valued at $40 billion
3. $2 billion advertising budget
4. Locally adapted food menus
5. Partnerships with best brands
6. More than 80% of restaurants are owned
by independent franchises
7. Children targeting
Weaknesses
1. Negative publicity
2. Unhealthy food menu
3. Mac job and high employee turnover
4. Low differentiation
Opportunities
1. Increasing demand for healthier food
2. Home meal delivery
3. Full adaptation of its new practices
4. Changing customer habits and new
customer groups
Threats
1. Saturated fast food markets in the
developed economies
2. Trend toward healthy eating
3. Local fast food restaurant chains
4. Currency fluctuations
5. Lawsuits against McDonald’s
Figure 1: Jurevicious, 2013

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Industry Analysis: Trends of Fast Food Delivery
At the top of the list we have already seen that pizza has made a huge profit from home
delivery service. Many Americans can relate to “hey lets order a pizza”, with a timely delivery
and hot and ready to serve bags. But recently we have seen a new trend, rearing its head, Fast
Food burgers. Leading competitors like Burger King, and McDonald’s are venturing into the
world of bringing its services to you. Obviously this will come with much competition; sense
consumers only relate home delivery to pizza. But trends are changing, and so must fast food
companies if they want to grow with the times. In fact, research has shown that there is a demand
for it. Recently, many fast food joints have actually ventured to add additional lanes to their
drive-thru for better service and time. Studies have shown that even catering has hit its stride
with an increase, as shown with companies, such as Panera Bread, which has to thank 8% of its
total sales in 2012 to just catering alone (Friend,2013). It is safe to say that there is definitely a
market for a home delivery service, not specific for just pizza.
Competitor Analysis: Who are we competing against?
As we move from drive-thru and a quick pick up to delivery, McDonald’s also changes
competitors. Instead of just competing against other fast food burger places, they also have to
keep in mind competitors that deliver, such as pizza and Chinese food. Even though the kinks are
still being worked out, one of the biggest competitors we see is Burger King. Since the rollout of
their delivery service, it has been trying to take the number one spot. Even though McDonald’s is
just putting one toe in the water, Burger King has already ventured into setting up a website, as
well as, pushing delivery into 34 stores in Florida, 13 in New York, 11 in Texas, 9 in Maryland,
and 8 in Virginia (Tice,2012). Mainly we seek delivery in pizza because for Americans that has
become staple in our homes. With Fast food, specifically burgers, there has to an open-minded

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consumer that is willing to try it and then recommend it. According to Forbes writer Carol Tice,
there are four main reasons why consumers may not bite at the bit for a delivery burger: 1. Fewer
burger parties- pizza is a classic party favorite, and have based business on home delivery with
fewer sitting area in pizza joints, 2. Impulse buy – burgers are usually craved when already out
and about, 3. Cold Burger-yuck!, 4. Execution Risk – delivery is an art form, and burger joints
have little experience (Tice, 2012).
Company Analysis: Where are we going?
McDonald’s is continuously growing. In 1955 when we first started we were a small
burger hot spot, and now we have evolved into an internationally known franchise, and we are
still growing. In recent news, we have dabbled in delivery of fast food, and possibly expanding
into more parts of the US. As the economy has changed so have we, but we still need to
capitalize on consumer behaviors, and external data collected. In the long-term, we will focus on
establishing and revamping existing locations (Strategist, 2014). Because there is a popular trend
with “health food” and a more conscience consumer, McDonald’s has the ability to modify and
tweak their menus to fit any consumer wants/needs. Along with our growth plan, McDonald’s
goal is to also push through into new markets and continue growing our brand. Plans are in place
to grow in expanding Asian and African economies (Strategist, 2014). Even though McDonald’s
has seen a bit of a declining and slow economic growth, we are still expecting to have growth in
the long term (Strategist, 2014).
Customer Analysis: Who to Target
Customer Characteristics: Customer grew up with McDonald’s as their go to, quick fix,
for a burger and fries. According the McDonald’s website, they like to think that they can fit any
type of consumer. With a variety of food options, healthy or otherwise, the demographic that

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McDonald’s caters to is extremely varied. Most of the time we see a bit of a smooth tune, with
anywhere from ages 20-30 enjoying a tasty McChicken and a coke with friends. Or we can’t
forget all those awesome toys and souvenir cups and plates consumers love to collect. Whichever
the reason for a consumer’s trip to the big golden arches, McDonald’s truly does have an array of
customer profiles. Below is a list of target markets:
Customer Reasons
Children 12yr & younger Toys in Happy Meals, Play sets in locations
Young Adults 16-25 Fast service, price, convenience, Wi-Fi
Busy Parents Fast and Easy, price, cater to children
Health Trend: Most consumers know McDonald’s as the burger place that asks “would
you like fries with that”, and “do you want to super-size it?”, but with Americans taking a closer
look at their own personal health, McDonald’s also has to accommodate consumers as well. With
healthier options such as, apple slices in happy meals, or a variety of salads, wraps and yogurts,
it makes it easier for the consumer to make healthy choices and still enjoy the McDonald’s that
they have come to love.
4. Market- Product focus
This section describes a five- year marketing and product objectives for McDonald’s, and
the target markets, points of difference, and positioning of its lines of the McDonald’s Home
Delivery.
Marketing and Product Objectives
McDonald’s marketing intent is to be in competition with the pizza delivery businesses, and
to build on its revenue and reputation by becoming a delivery service while keeping up with their
fast food restaurant competitors. These are detailed in the four areas:

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• Current Markets: Current markets will continue to bring in revenue. With continued
advertisements, repeat purchases, the dollar menu, and coupons, sales will grow.
• New Markets: The new market will bring a delivery service by the end of year 5. This
delivery service will be expanded to cities all around the country, and in countries’ where
access to roads, and vehicles are obtainable. The objective is to eventually have 85% of
McDonald’s restaurants offering the delivery service.
• Food Service: This will include all sales made by delivering a McDonald’s food product
to a location. Sales are expected to grow 2% or $480,000,000 for the first year the service
will be in place.
• New Products: The first year of the delivery service will first be setting up the market
strategy, setting protocols, and safety standards for maximum customer satisfaction and
employee safety. The delivery service will first be implemented in several metropolitan,
cities, and towns across the United States for the next two years. The product will then be
expanded to more cities in the country, and to major cities around the world where a
McDonald’s restaurant is located for the last two years. By then the product would be
fully brought into the market.
Target Markets
The primary targets for this product will be for youths and adults who want a
McDonald’s meal but do not have the capabilities or resources to get to a McDonald’s restaurant.
These individuals are usually the group that is interested in eating food from a restaurant that is
familiar or home-like, and who find value in the McDonald’s food items.

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Points of Difference
The “points of difference”- the characteristics that make the McDonald’s delivery service
unique compared to its competitors. These characteristics fall into these three areas:
• Unique tastes and convenience: McDonald’s is known for its tasty, quick meals that are
is perfect for an individual who has a tight budget. The restaurant is also known to be in
locations close to residential areas, and cities, for the convenience of the residents in and
around these areas.
• Taste trends: McDonald’s looks at certain flavor preferences in particular areas in and
around the chain of restaurants and also considers the taste preferences in gender and age.
This is to ensure that every segment of the market is satisfied with the McDonald’s
product.
• Familiar Packaging: McDonald’s is known for its unique
golden arches, and its slogan “I’m lovin’ it”. This brands a
product as having the McDonald’s quality, and fast service
that only McDonald’s is able to provide.
Positioning
In the past McDonald’s has never delivered their product to individuals in and around
their restaurants. McDonald’s will put their quality, fast service into the delivery service that will
leave customers satisfied, as McDonald's slogan says “Lovin’ it”, and wanting more.
Photo courtesy ofburgerbusiness.com

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5. Marketing Program
The four marketing mix elements of the McDonald’s delivery service marketing program
are detailed below:
Product
After first summarizing the product line, the approach to product quality and packaging is
covered:
 Product line: McDonald’s will deliver any of its items off the menu to a specified
location given by the caller.
 Unique Product Quality: McDonald’s unique quality and flavor is what customers are
wanting and expecting from a McDonald’s restaurant. From the delicious, salty French
fires to the fresh cut garden salad, McDonald’s will continue on its reputation that has
been built up over the past 60 years it has been a restaurant.
 Packaging: McDonald’s Golden Arch packaging is known worldwide. This has been
through a clever, and easy to remember motif, that has been used for over 60 years. Its
restaurants are strategically placed near highways or in populous areas. McDonald’s
advertising is on billboards, in magazines, and on TV commercials. The McDonald’s
Golden Arch is recognizable everywhere.
Price Strategy
The fee for delivery has been made to follow this method of payment, if the customer
asks for the order to be delivered:
If a customer’s order is $10 and below, a 5% delivery fee will be put on top of the order
payment. If a customer’s order is between $11- $20, a 4% delivery fee will be added. If a
customer’s order is between $21- $30, a 3% delivery fee will be added. If the order is between

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$31- $40, a 2% delivery fee will be added. If the order is between $41- $50, a 1% delivery fee
will be added. Orders adding up to $51 and above will not have a delivery fee added. Note that
this is a general structure for the delivery fee system. Rates will also depend on how far the meal
must be delivered, and the area that the meal is being delivered to. (ex: The delivery fee will be
more if the gas prices are higher or if traffic is a continuous factor in the delay of a meal
delivery).
Place (Distribution) Strategy
McDonald’s restaurants are distributed throughout several metropolitans, towns and cities
throughout the United States, and in major cities and airports throughout the world. There will be
more restaurants built as demand for the McDonald’s product market grows. McDonald’s buys
its ingredients from several different suppliers and retailers, and distributes them to their many
restaurants. As sales grow, McDonald’s will have to buy more supplies to keep up with the
demand of its consumer’s wants and needs.
Promotion Strategy
Key promotion strategies feature advertisements, online delivery orders, and coupons to
try and get customers to order delivery.
• Advertisements- McDonald’s will air commercials online and on the television about the
restaurant and the new delivery service option to catch the attention of the younger
generation. McDonald’s will also put up billboards, and magazine/ newspaper
advertisements to catch the attention of the older population that is often in a vehicle
and/or prefers reading over television.

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• Online Delivery Orders- McDonald’s will have the option to make it convenient for
customers who prefer to take their time looking at the menu. This also makes it
convenient for those who know exactly what they want and do not want to have to deal
with the interference that comes with talking over the phone. Making the delivery service
convenient is a way to generate more customer loyalty and ensure the customers will get
the service they want.
• Coupons- To generate repeat purchases through the McDonald’s delivery service,
coupons will be distributed in the following five ways:
• Direct-Mail coupons- these coupons will be spread to the households in and
around the area of a McDonald’s restaurant. This gives the customers at home the
option of asking for delivery and already having the delivery number instead of
having to look it up.
• Coupons received in the drive-thru - these coupons will be passed out to
customers that may become, or are repeat customers.
• Online coupons- these will be given to the customers who receive several things
online through email or messaging.
• Sunday newspaper inserts- these will be received by customers in a wide area to
help increase customer purchases.
• Mobile app coupons- these coupons will be received by any customer who has a
mobile phone and signs up for the free app.
6. Financial Data and Projections
McDonald’s has experienced an increase in revenue between the years of 2009 to 2013.
The annual revenue has increased by approximately 7.5 million dollars within the 4 years. The

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Year 2009 Year 2010 Year 2011 Year 2012 Year 2013
Currency in Millions 22,745 24,075 27,006 27,567 28,106
Revenue
Currency in
Millions
introduction of the delivery service will provide an extra boost in the annual revenue for the
years of 2014 through 2018 and beyond. Below is the amount of revenue earned for the listed
years.
Five-year Projection
McDonald’s five- year financial projection for the delivery service, will forecast an
annual revenue increase to the sum of approximately 2 to 4 percent. These percentages are based
on the how much the customers utilize the delivery service, it also depends on the market
overview of McDonald’s competitors once the delivery service has been implement. The
fluctuations in market place throughout the five-year trial point will play a vital role in
accumulating the maximum percentage of annual revenue. The figures on the next page display
the lower percentage rate for the first five years beginning with the revenue earned in 2013.

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Year 1 Year 2 Year 3 Year 4 Year 5
Actual
Delivery
Service
Delivery
Service
Delivery
Service
Delivery
Service
Delivery
Service
Financial Element 2013 2014 2015 2015 2017 2018
McDonaldsin US 14278 1428 3212.5 3212.5 3212.5 3212.5
NetSales(Millions) 4,744.30 4,839.20 4,936 5,035 5,136 5,238
Gross Profit(Millions) 2742.8 2797.66 2853.61 2910.7 2968.91 3028.29
7. Implementation Plan
The McDonald’s Corporation will now provide our customers with a convenient service
of having food delivered to their businesses and homes. McDonald’s currently has over 14,000
restaurants within the United States. During the current 2014 initial year, McDonald’s will begin
the delivery service with 5% of the restaurants located in the downtown and metropolitan areas
of U.S. cities. The first years for the delivery service coverage will not extend beyond a 3-mile
radius of the McDonald’s restaurant locations for this initial trial year. We will carefully analyze
the results of the data collected from the sales forecast from the initial delivery service year to
correct any noticeable problems in the service. The McDonald’s Corporation in 2015 will extend
the delivery service to include 15% more restaurants of the U.S. cities downtown and
metropolitan areas. In the 2016, we will extend the delivery service to 20% more restaurants;
25% more in 2017 and 25% for 2018. At the 5-year point, the delivery service will be an option
for the McDonald’s customers for every restaurant location in the cities of the U.S. The table
below displays the first initial 5-year rollout schedule for the delivery service.

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Rollout Schedule the First 5 Years
* % Of stores set to initiate delivery service
The ideal for implementing the delivery service is to target the consumers that have
visited our restaurants throughout the duration of the current year (2014), and to focus on
increasing those consumer numbers for the next 4 proceeding years. McDonald’s implementation
of the delivery service will also increase our popularity, thus helping McDonald’s to enter the
delivery market with other restaurants that offer the same type of service for their customers.
Our overall goal is to increase customer satisfaction and to compete with other restaurants that
provide a delivery service.
Targeted areas % of
stores*
Year 1
2014
% of
stores*
Year 2
2015
% of
stores*
Year 3
2016
% of
stores*
Year 4
2017
% of
stores*
Year 5
2018
Downtown
Area
5% 15% 20% 25% 25%
Metropolitan
Area 5% 15% 20% 25% 25%

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8. Evaluation
Through McDonald’s five-year plan, the increase and traffic from current and new
customers will increase revenue from 2-4%. This will assist in meeting company goals, and
moving the company into a new era of delivery. With McDonald’s already spectacular
reputation, the company plans to build on this by providing customers with a “bring it to you”
evolution. After the rollout schedule has begun, we can perfect our service by listening to our
customer’s feedback, and using surveys to make our delivery option smoother and easier for our
loyal customers. Overall the implementation will bring a guaranteed increase in revenue, and an
increase in customer traffic. This in turn, will continue to make McDonald’s more accessible in
multiple ways, and bring more customer satisfaction resulting in continuous long-term success.

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Reference Page
Financial Highlights :: AboutMcDonalds.com. (n.d.). AboutMcDonalds.com. Retrieved March 22, 2014, from
http://www.aboutmcdonalds.com/mcd/investors/financial_highlights.html
Friend, E. (2013, June 7). Fast Food Delivery Part 2: Risks and Opportunities in the US - Analyst Insight from
Euromonitor International. Analyst Insight from Euromonitor International. Retrieved March 20,
2014, from http://blog.euromonitor.com/2013/06/fast-food-delivery-part-2-risks-and-opportunities-in-
the-us.html
Martin, K., & Barker, H. (2013, November 14). McDonald's – Official Global Corporate Website ::
AboutMcDonalds.com. McDonalds. Retrieved March 17, 2014, from
http://news.mcdonalds.com/Corporate/Press-Releases/Financial-Release?xmlreleaseid=123040
McDonald's Corporation: NYSE:MCD quotes & news - Google Finance. (2014, March 22). McDonald's
Corporation. Retrieved March 22, 2014, from https://www.google.com/finance?q=NYSE:MCD
&fstype=ii&ei=OkRCU6CcAenhsQfbLw
McDonald's Mission and Corporate Values :: AboutMcDonalds.com. (n.d.). McDonald's Mission and
Corporate Values :: AboutMcDonalds.com. Retrieved March 17, 2014, from
http://www.aboutmcdonalds.com/mcd/our_company/mission_and_values.html
McDonald's Reports Fourth Quarter And Full Year 2013 Results. (2014, January 23). The Wall Street Journal.
Retrieved March 22, 2014, from http://online.wsj.com/article/PR-CO-20140123-907102.html
Our Focus Areas :: AboutMcDonalds.com. (n.d.). Our Focus Areas :: AboutMcDonalds.com. Retrieved March
17, 2014, from http://www.aboutmcdonalds.com/mcd/sustainability/our_focus_areas.html
Pizza Delivery Q&A. (2009, August 13). . Retrieved April 21, 2014, from
http://www.tipthepizzaguy.com/qna/2dollarfee.html
Rosenburg, M. (2012, June 1). How Many McDonald's Restaurants Operate Worldwide?. About.com
Geography. Retrieved March 21, 2014, from http://geography.about.com/od/lists/qt/mcdonalds.htm
Schneider, S. (n.d.). McMarketing: McDonalds Marketing And Advertising Hits And Pits. noupe. Retrieved
March 21, 2014, from http://www.noupe.com/inspiration/mcmarketing-mcdonalds-marketing-and-
advertising-hits-and-pits.html
Strachan, M. (2013, October 21). McDonald's Billion-Dollar Profit Is Awkwardly Close To The Amount It
Costs Taxpayers Every Year. The Huffington Post. Retrieved March 21, 2014, from
http://www.huffingtonpost.com/2013/10/21/mcdonalds-profit-taxpayers_n_4136336.html
Strategist, A. (2014, March 20). McDonald's - Bright Long-Term Prospects. McDonald's Corporation (MCD)
news:. Retrieved March 20, 2014, from http://seekingalpha.com/article/2099693-mcdonalds-bright-l
ong-term-prospects
SWOT analysis of McDonalds. (n.d.). McDonalds SWOT analysis 2013. Retrieved March 20, 2014, from
http://www.strategicmanagementinsight.com/swot-analyses/mcdonalds-swot-analysis.html
Tice, C. (2012, November 28). Will McDonald's and Burger King Deliver...to Your House?. Forbes. Retrieved
March 20, 2014, from http://www.forbes.com/sites/caroltice/2012/11/28/will-mcdonalds-and-burger-
king-deliver-to-your-house/

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