McDonald – Market Segmentation, Positioning and Branding
I hereby declare thet the reseach paper titled MCDONALD – MARKET SEGMENTATION, POSITIONING AND BRANDING submitted by_____________________________________ is based on actual and authentic work. Any reference to research conducted by any other institution or person or any material obtained from secondary sources is duly referenced and cited. I further declare that the paper is original and will not be in future.
This study explored the various ways in which McDonald’s market performance can be enhanced in ways that would reverse the negative performance indices that have been witnessed in the past performance records. The study is built on the proposition that the dismal performance of the company connects with ineffective strategies and the rapidly changing business environment. Specifically, the study focused on the factors of segmentation, branding, and positioning as some of the most effective strategies of revamping the general operations of the firm. The methodology of the study involved a review of the company’s profile and published literature in peer-reviewed journals with relevant information on the subject. The scope of the study entailed the company’s presence and operations within the Americal local market and its global reach. The results of this strategy are essential in exploring opportunities for market growth and improved performance.
TABLE OF CONTENTS
Introduction …………………………………………………………… 5
Rationale of the Study …………………………………………………. 6
Research questions……………………………………………………… 6
Scope of the Study……………………………………………………… 6
Objectives of the Study…………………………………………………. 7
Literature Review…………………………………………………………………………. 7
Findings/Data Analysis ………………………………………………… 17
Discussion ………………………………………………………………. 23
Conclusions ……………………………………………………………. 23
Recommendations ……………………………………………………… 24
Market analyses and researches on the performance of food-based multinationals have shown that McDonald’s continues to enjoy an unassailable lead in various aspects of the fast food sector. Past and recent financial records show that McDonald’s enjoys a strong showing in the global market because of strategic reorganization and the adoption of creative marketing techniques. McDonald reported improved profits in the first quarter of 2013 and revenue of $ 6.59. However, these results have caused concern among shareholders and stakeholders since they reflect significant dipping when compared to the firm’s performances in the previous years. Financial and market analysts continue have given forecasts that show a possibility of further decline in the volume of profit in the coming financial periods. McDonald’s shares reported a significant drop of 2 percent in the year 2013. Many analysts point at the rising levels in competition as the major cause of the noticeable decline in the company’s performance.
Questions have arisen regarding the effectiveness of past marketing strategies adopted by the company. For instance, market analysts have sought insights into the value of strategies such as the Dollar Menu on the overall performance of the company. Performance indices seem to point at non-significant effects with regard to some of the strategies adopted in the past half-decade. Against this backdrop, suggestions have emerged regarding the need for the company to adopt tested and results-oriented marketing strategies to achieve its set performance objectives. As such, it becomes necessary to study some of the effective market approaches that can reverse the current negative trends in order to return the company on the thresholds of stability and performance. Various forecasts show that the strategies of fending off emerging competition from the local and global markets must entail multiple strategies that incorporate quality adjustment, product portfolio reviews, segmentation, and other effective strategies that can return the company to stability and performance growth.
To Wright et al. (2011), the fast food industry is rapidly changing with regard to the level of competitiveness, changing customer preferences, the impact of globalization, and the entry of new players on the market. For decades, Wiid & Diggines (2009) affirm that McDonald’s dominance of the first food market has been made possible by the reliance on traditional marketing practices that emphasized more on the provision of services that attend to the needs of efficiency, convenience, and speed. This approach was mainly suited to the American local market. The dominant issues that attend to the expansion of the market have their value in the establishment of effective marketing strategies that promote the performance indices in the areas of profits and revenues. Strategic management policies, which were adapted in the past years have helped the company maintain its leadership in the global markets in ways that are consistent with the prevailing trends on the market. However, noticeable declines in the performance of the company are indicative of underlying challenges that impede progress and stability in the market.
To Rowley (2004), financial results for the year 2013 fell below the expectations of American analysts. The steady decline in stocks also illustrates the existence of significant challenges at the core of the company’s operational strategies. Competitors such as Chipotle, Potbelly Corporation, Mexical Grill, and The Noodle and Company seem to have eaten into significant sections of the McDonald’s local market in the past decade. Efforts to reverse the shrinking market niche have entailed the application of new marketing strategies that align with the shifting realities of the market (Rowley, 2004). The designers of McDonald’s marketing strategies recognize the need to adjust their marketing strategies in ways that align with new market realities. Some of these realities include the shrinking of the traditional market segments such as the Baby Boomers and the Millenials. McDonald relied significantly on the shared preferences among this category of customersto achieve its strategic marketing goals. However, the passage of time witnessed changes in preferences among these important groups, which marked the beginning in the decline of sales and profit margins.
To Rowley (2004), the traditional market segment has embraced the values of healthy living, which makes many of them to adjust to new dietary practices. The American population is quickly confronting the reality of lifestyle diseases that connect with bad nutrition practices. The messages of low-sugar, low-calorie, and low-fat content in food have continued to affect the way the consuming public approaches its dietary practices. In essence, new patterns of eating have meant that populations move away from the fatty foods with high sugar content. Clients who adopt different patterns of lifestyle tend to associate McDonald’s products with negative health practices that affect the health of the populations. Therefore, McDonald must face the challenge of revising its marketing strategies and increasing its range of products in order to reverse the negative trend of losing its traditional market segments. The local and global market has shifted in patterns of consumption and split into categories that align with different demographic categories.
A study by Rowley (2004) illustrates that, McDonald’s strategies have often entailed the development of new market segments in order to serve the diverse tastes of the market. This realization connects with the fact that humans tend to adopt unique approaches on matters of diet. Some of the determining factors with regard to this uniqueness includes cultural factors, prevailing trends, seasons of the year, and other important factors that align with the diverse nature of humanity. In essence, the key factors that connect with the concerns of the market must attend to the key areas that determine profitability and revenue flow in the industry. The loss of significant sections of the market to emerging players shows that Mc Donald should find strategies of consolidating the local market in order to lessen the level of threat posed by new players on the market.
The fundamental factors that determine the performance of the company on the market are significantly affected by the manner in which the company creates new market niches for its growing range of products (Rowley, 2004). The future of the company is largely dependent on the capacity of the company’s management to develop new business strategies for market survival. Some of the recent strategies adopted by the market include the reduction of prices in its range of products in order to get the competitive advantage on the market. The fast food market changes in line with multiple realities in the market. These realities work differently in various parts of the market. In the long-term, some of the issues that determine the performance of the company. The fundamental goal that drives the current marketing strategies entails the reliance on branding, segmentation, pricing, and other factors in order to promote the operations on the market.
Scope, aim, objectives:
This study focuses on a range of objectives that focus on the most effective strategies of revamping the fortunes of McDonald’s fast food business. The scope of the study entails the vastness of McDonald’s business reach within its local market in the United States and other areas around the world. The scope also covers the different kinds of McDonald businesses in a way that determines the performance of the market. The performance of the restaurants, franchises, and other divisions of the McDonald businesses shall fall within the scope of this study. The general objective of the study is to examine the strategies by which McDonald can improve its overall performance.
- Market segmentation: To determine the possible strategy and effect of market segmentation on the specific indices of performance by McDonald’s.
- Positioning: To explore the value of positioning as a viable business strategy to revamp McDonald’s performance in its key segments on the market.
- Branding: To suggest the most effective strategy of branding as a way of enhancing the market influence on the market with the view of reversing McDonald’s negative trends in performance.
- To explore new ways of accessing the emerging market segments as a way of revamping the operations of McDonald’s local and global businesses.
As Wright et al. (2011) put it; McDonald’s has grown to become one of the leading fast-food restaurants in America and around the globe. This research shows that, several competing companies have kept track with the company. Some of these competitors include Dunkin Donuts, Starbucks, KFC, Dominos and Pizza Hut among others. Many of the competitors have grown in their potential as quick service providers to take-away customers. Regardless, Rowley (2004) believe that McDonald’s has maintained its competitive edge through the creation of a strong brand name and strategic market positioning.
A different research by Christiaans (2013) outline that, the market segmentation entails emphasis on population, geographical and psychological elements of a market for a company. Every customer as discussed by Vignali (2001) and Wright et al. (2011) has a different preference and marketing strategies aim at satisfying the needs of all customer. Failure to recognize this fact results in market dilution, which every business aims at mitigating. Market segmentation is the process of grouping customer into different segments where customers with similar characteristics are grouped together. Through marketing segmentation, the company is able to serve the needs of all its clients. According to Wright et al. (2011), market segmentation entails subdividing the market into dissimilar and homogenous groups of consumers where each subgroup can be selected as a target within the marketing mix. Segmentation is an iterative and creative process whose purpose is to satisfy consumer needs closely, create a competitive advantage. Consumers determine market segmentation. The process also helps in the determination of new opportunities within a market. Many studies have explored McDonald’s market segmentation. Segmentation is a principal building block for effective marketing at McDonald especially Vignali (2001)
A study conducted in 2011 showed that, segmentation a McDonald can be divided into three categories: geographical, psychographic/demographic and behavioral/ psychographic segmentation (Wright et al 2011). McDonald has made significant milestones in market segmentation. Geographic segmentation entails division of the market into groups based o n geographic location. Wright et al. (2011) conducted a survey to understand the company’s geographical segmentation. The survey involved a thorough investigation of the company’s website and questionnaires to its management. The results showed significant geographical segmentation. According to a different study, McDonald had branches in different parts of the world (Rowley, 2004). The key branches are located in the United States. However, this research shows that the company has expanded its operation to the Middle East, Far East, Australia and New Zealand and Europe. These restaurants offer different customer care services other than the products as further supported by Vignali (2001). In his research, Munroe (2013) affirm that the restaurants usually offer different services that suit the customers in these different locations. For example, the New Zealand branch offers kiwiburger to suit the needs of the locals. Kiwi is an animal found in New Zealand, and offering a kiwiburger attracts consumers who want to be associated with the country’s ecology. In Indonesia, Belk (2006) postulates that McDonald offers McRice, Paket Panas, fried chicken and McRice since it realized that the country’s staple food is rice served with eggs and fried chicken. In North African countries (Morocco), the company offers air conditioning units and dehumidifiers to suit the needs of the North. From the above analysis, it is evident that McDonald’s offers different services depending on the geographical conditions of the location.
Demographic segmentation entails the division of a market based on gender, nationality, religion and family cycle (Rowley, 2004). The study found out that McDonald segmented its marketed depending on age, family cycle and religion. McDonald segmented their product on customers’ religion guided by the geographic location of the restaurant. To cater to the needs of its plethora of customers, (Belk, 2006) believed that McDonald concern about the variations of religion in these different geographies. This is because different religions differ in their tastes depending on their cultural issues and religion. For example, in Malaysia, the restaurant does not offer hamburgers since Muslims do not eat pork. Instead, the restaurant offers beef burgers to avoid the word ham. Additionally, in Morocco, the restaurant offers all meats are referred to as halal. On the other hand, Auxin & Pearce (2006) argues that, in Israel, religion restricts beef and dairy products. Consequently, kosher restaurants in Jerusalem do not offer cheeseburgers and other related products. The restaurant offers vegetable burgers (veggie burgers) wherever there is demand, which includes Western Europe and India. However, the company never satisfies its products as vegetarian. On this note, Viganali (2001) affirm that the company was in the limelight after a highly publicized lawsuit for using beef in the preparation of French fries, which were marketed as cooked in pure vegetable oil. In liberal countries such as the United States, the company serves a wide variety of foods many of which are not availed to people in other countries.
Vignali (2001) conducted a parallel study to investigate the company’s market segmentation. The investigative study made use of questionnaires to test the gender, age, income, ethnic background and family lifestyle. This aimed at investigating the company’s demographic segmentation. The study made a proposition that a company’s target market determines its penetration. According to the study, different companies target different customers to create differentiation. Age and lifestyle are among the aspects targeted by the company. The study found out that the company targets customers aged between 15 and 38 years. A parallel study aimed at investigating the company’s psychographic segmentation. To FGIT & Lee (2009), behavioral/psychographic segmentation has also garnered significant interest from different market researchers. Behavioral segmentation lays emphasis on market division founded on the knowledge, uses and consumer attitudes, response of the company and the benefits sought by the consumers. Dividing buyers according to the benefits they seek to acquire from products makes one of the best forms of behavioral segmentation. Often, people look at the services offered as a benefit of acquiring products from a company. For example, a study conducted by Calkins (2008) concluded that many consumers choose McDonald over its competitors because of the benefits of their services. McDonald offers services such as a twenty-four-hour McDelivery for consumer orders. McDelivery services and menu are based on the time of order from customers. The service targets consumers living in areas where the restaurants do not operate on a twenty-four hour basis. According to Munroe (2013), psychographic segmentation entails personality, lifestyle and motives. The American population has adopted a pop culture engrossed around takeout from fast-food restaurants. According to the study, the company targets the personality and lifestyle of the American citizens.
Branding is one of the most essential parts of a marketing strategy in a company (Christiaans, 2013). Branding is a key marketing objective for any company. A marketing strategy is created for the determination of means through which a set of objectives may be achieved. According to Auxin & Pearce (2006), a marketing objective aims at communicating what marketers want to achieve. It also guides the marketing activities used in measuring how well the plan works. FGIT & Lee (2009) affirm that, upstart competitors continue entering the market leading to stiff competition for McDonald. Therefore, the creation of value proposition is essential for McDonald for countering competition. Creation of value proposition requires significant branding. For McDonald, the emotional connection with clients is a signature for its success in establishing its brand name. Branding aims at creating connections that cut across the company’s market segments. McDonald’s has a significant number of connections cutting across its variety of consumers. Additionally, McDonald’s has created multiple connections at three different levels: high-order emotional connection, brand differentiation and functional satisfaction.
The above illustrates that the functional satisfaction level among consumers gives a strong connection in terms of affordability, location and easy dining (Rowley, 2004). Brand differentiation has four-point connection created fundamentally by the advancement in the restaurants’ menu and style of service. High-order emotional level has a three-point connection with consumers. This includes rewarding consumers and employees. This suggests that growing the brand’s connection increases penetration. These connections increase market connection thus increasing the brand awareness and cementing its brand name (FGIT & Lee (2009).
Rowley (2004) conducted a study to explore the impact of online branding based McDonald’s market. The study used a case study approach with emphasis on strategies used by the company in the past. The study followed an analytical case study of the investigation of fundamental factors connected with strategies of online marketing and branding (Belk, 2006). The research also explored the impact of electronic or online marketing as an approach of creating brand awareness. The study explored other studies on the same area on the probability of integrating traditional and online branding in establishing a market. The study did not engage on the common effects of online marketing but concentrated on brand image. According to this study, online marketing significantly has played a significant role in establishing the company’s brand name. Technological advancement enables people to access product easily. Through online campaigns, consumers can locate restaurants. Additionally, they can make some of their orders from the touch of a button. This creates awareness of the brand among the targeted audiences. Branding focuses on creating awareness of a product or company. This strategy was considered a significant factor in the company’s market penetration and brand awareness.
A similar study carried out by Gupta (2003) tried to establish the value of franchising as a strategy in branding. The study was conducted with emphasis on the partnership between McCafe and McDonald’s. The research used an analytical case study focusing on the case of co-branding in Australia. The study investigated the unique incentives and inhibitors of a strong brand in the Australian context (Rowley, 2004). A theoretical model entailing co-branding and franchising as effective strategies in achieving synergies for connection with market requirements guided the study. The study suggested that the company can seize the opportunity of franchising to increase its brand awareness across the globe (Vignali, 2001).
Viganali (2001) argues that, the company has also been involved in rebranding to align its focus with consumer preferences. In 2003, the company changed its blueprint from “the world’s best quick-service restaurant” to “ Plan to Win”. This aimed at changing the focus of the company from the services offered to consumers served. This form of rebranding is essential for the success of the company. Modern companies are continually changing from product-orientation to consumer-orientation to suit the needs of their consumers. McDonald was not left behind. Additionally, Kapferer (2008) assesses the change of the company’s mission to “being our customers’ favorite place and way to eat”. This led to drastic changes in the company’s strategic directions and priorities.
Positioning involves taking different actions from competitors or doing taking same actions as competitors, but executing them differently. According to Kazmi (2008) , positioning entails organizing a product to occupy a distinctive, desirable and clear place in relation to competing products. Positioning aims at distinguishing a company’s products from other competing brands. It also creates a competitive advantage when applied effectively. Positioning significantly determines a company’s performance. Many companies describe their positioning in terms of clientele base (Kapferer, 2008). To Kurtz (2012), the strategy of positioning aims at satisfying different market segments. Positioning is conducted in relation to segmentation. For example, Burger King targets young, adult males. Therefore, the segmentation (target market) of a company plays a significant role in determining its positioning strategy. Additionally, the company’s marketing mix significantly influences the positioning strategy used. According to Kurtz (2012), McDonald’s has used pricing and product (components of the marketing matrix) as a key positioning strategy. McDonald’s has established itself as a family-friendly, low cost restaurant in the industry. The company employs a low cost strategy and a narrow scope for customer base. A study conducted by Landy (2010) found out that, in the past years, McDonald’s had been broadening its scope to appeal to other potential customers. This includes making the menu healthier than it was. The company, however, still narrows its market to families although it acknowledges the need to include a wide array of demography as discussed by Parasuraman et al. 2007; Riesenbeck & Perry (2009).
According to recent studies, the company has also utilized technological advancements to position itself as superior to its competitors (Parasuraman et al. 2007; Riesenbeck & Perry, 2009). The company uses computer-operated machines that allow quick service delivery. This is also reflected in many other business operations. Many McDonald’s use dual drive-through that reduce wait time and increase the number served per unit time. A study conducted by Monika and Wedel & Kamakura (2000) investigated the effect of communicating unique messages concerning corporate social responsibility to young consumers. The study was based in the United Kingdom and targeted young consumers only. The level aimed at understanding the level of interest among young people on corporate social responsibility. Consequently, this would test the attitude and perception of these consumers towards the company. The study found that McDonald flourishes in an environment with liberalized trade in the global market. The young consumers had a positive reception of the message suggesting that the company has created significant awareness in UK. The study also found out that the creation of effective corporate social responsibility could act as a marketing strategy for the company. Consequently will increase brand awareness and establish the brand company’s brand name (Parasuraman et al. 2007; Riesenbeck & Perry, 2009).
Wright et al. (2001) and Rowley (2004) offer concise understanding of the company’s segmentation. A combination of the two studies would be more beneficial in understanding how geographical segmentation influences demographic and behavioral segmentation. On the case of branding, Rowley (2004) fails to show the impact of other strategies involved in branding. Narrowing the study to online branding does not offer a complete understanding of the branding strategies employed. Gupta (2003) narrows his study to franchising. The area has not been fully untilized by McDonald; therefore, the study is superior since it offers an insight of the strategies that the company can use in expanding its presence globally.
Chapter 3: Methodology
The research uses both primary and secondary sources of data. Primary and secondary data serves different purposes in research (Ott & Longnecker, 2010). Generally, secondary sources help in analyzing market potentials, sales forecasting, assessing trends of the industry and providing initial information to guide in primary data collection (Olsen, 2012). On the other hand, primary sources provide first-hand information and direct evidence pertinent to the topic of study. Surveys, experiments and observations, form the most essential category of primary data sources (Nijssen & Frambach, 2007).
For this study, secondary sources were used to assess McDonald’s trends, analyze its potential and guide in primary data collection. Secondary data is derived from journals, peer-reviewed articles and case studies from libraries, magazines and the internet. The articles were selected in relation with the objectives of the study. Relevant data was gathered from the aforementioned documents and databases for analysis of McDonald’s positioning, branding and segmentation. Since the objectives for the research had been determined, only relevant data was included. This called for an appropriate choice of what data was essential for the study. This called for the review of several issues in the documents such as the price range of the company, consumer opinion concerning products and the brand name, advertising strategies and differences in attitudes between people of different social classes. Much of the data collected from the primary sources is included and summarized in the literature review.
The study used a survey in the form of a questionnaire to answer the research questions. Sample selection involved random sampling. However, this was restricted to only frequent customers. Additionally, before consent was acquired, the proximity and ease of reach of the participants was first determined. The selection involved visiting several restaurants, gaining consent from several customers and administering the questionnaire. One hundred consumers participated in the study. The questionnaires were collected after three days. A scrupulous analysis of the answers was done after which incomplete questionnaires were returned to the respondents for completion. The questionnaires used closed questions because they are considered easy to process on the part of the respondent. Response required the respondent to tick or circle an answer for the appropriate response. Closed questions enhance comparability of answers making it easy to show the relationship between variables and make comparisons between respondents or group of respondents (Lodico et al. 2010; Miles, 2013; Langdrdge & Hagger-Johnson, 2009). Additionally, closed questions can clarify the meaning of the question for respondents. Sometimes respondents may not gain clarity of the question, but the availability of an answer helps in clarifying the situation. Additionally, respondents can complete the questionnaires faster and effectively since they do not have to write extensively. Instead, they have to pick the response they suppose correct.
Validity and reliability of the test instrument is essential to ensure consistency of results. Validity entails the extent to which an instrument should measure (Phillips & Stawarski, 2008). For this study, content validity was measured by analyzing the scope of coverage of the questionnaire in relation to the research question. The research concentrates on McDonald restaurants thus the questions are confined within this context. The individual questions included determined the face validity of the questionnaire. According to Sapford & Jupp (2006), face validity refers to the extent to which a test seems to measure what it claims to measure. The questions used also determined the questionnaire’s construct validity.
Reliability required trustworthy measurements. Reliability entails the extent to which an instrument measures the intended measurement (Shensul et al., 1999). Rationale equivalence reliability was essential for this study. It involves estimation of internal consistency through the analysis of relationships between test scores (Stevens, 2007). For this study, the answers should not deviate from each other significantly because the sample chosen are customers.
The results of the analysis will be compiled in charts and tables. This will allow readers understand and analyze the results. Additionally, the visual representation will help in understanding the relationship between the statistics and the hypothetical question.
Findings and Data Analysis
Qualitative data is essential because of its opulence of information (Pawar, 2004). However, the identification of the analytical paths for this opulence is challenging. In relation to quantitative data, qualitative data analysis is iterative. Analysis of data commences immediately after data collection process begins with each step shaping the next. This section discusses the analytical methods used for the data collected (Olsen, 2012).
In the study, thematic analysis was essential for shaping the analytical process. It involved a systematic process of codes and themes. This involved the identification of themes observed from the data collected. According to Boyatzis (1998), thematic analysis is suitable in understanding phenomena especially in marketing trends in business research. Themes and codes are essential since they help in the organization and interpretation of the elements contained in the phenomena (Miles, 2012). The data was organized into themes for the related responses. Consequently, the themes were encoded for easy analysis.
In summary, 59 percent of the respondents were male while 49 percent were female. 75 percent of the respondents were aged between 15 and 38 years. A further 83 percent were daily clients at McDonalds, 13 percent of the respondents frequented the restaurants at least three times a week while the remainder was testing the restaurant’s foods. The majority of the respondents preferred McDonalds as compared to the complimentary restaurants. In analyzing the results, the largest percentage of variance indicated that consumers’ perception had a positive connection with the establishment of the company’s brand.
In describing the relationship between factors and variables, PCA (Principal Components Analysis) was conducted. Because of the component analysis, a table of related component matrix was formed. Six factors were formed. The six factors were defined according to their relationship with the factor. The factors are:
- Related to the characteristics of the response
- Related to the responder
- Related to the marketing strategy employed
- Related to the consumers perception
- Related to the recommendations offered to improve marketing
- Related to the products
Twenty seven percent of the variance indicated that consumers’ perception had a significant impact on the operations of the company. This implies that, in marketing, the creation of a value proposition is essential in establishing a brand name. Eleven percent of the variance indicated that details of the response have a positive affiliation with the demography of those individuals. This includes the respondents’ gender, residence and frequency of visits to the restaurants. Fifteen percent of the variance indicated that online marketing had a positive relationship with the reliability, popularity and internationality of the restaurant. Five percent of the variance indicated that the significance of branding had a positive connection with loyalty and purchases at the restaurant over the competitors. Four percent of the variance indicated that the aspects of the marketing matrix employed at the restaurant had a positive effect on the appeal of the restaurant’s products to the consumers. Three percent of the variance indicated that the strategies employed in segmentation had a significant influence in determining the internationality of the company.
For the investigation of the relationship (0.05) between characteristics of respondents and the frequency of buying at McDonald’s, a one-way MANOVA analysis was conducted. The results indicated that there were noteworthy effects of the company’s positioning on the choice and frequency of purchasing at McDonald’s. Additionally, there were considerable relationships between the awareness of the brand and the decision to make McDonald’s the restaurant of choice over its competitors. A considerable difference between positioning of the restaurants and the customers’ review of competing restaurants was also noticed. Furthermore, there were apparent differences between a customer’s decision-making and the number, and consistency of the changes in the product line of the restaurant. The results also found that the market segmentation employed at the company determines the number of customers that frequent the restaurants. Additionally, the use of technology affected consumer’s decisions on purchasing at the McDonald’s over other competitors.
Twelve suggestions were generated for the identification of respondents’ perceptions about the brand name, segmentation and positioning of the company. The degree of perception of the three factors was identified through a 5-Likert scale. The degree of perception of the respondents in predetermined suggestions was found to be high. This signified a positive relation between respondents’ perceptions and the strategies used in segmentation, branding and positioning. It was observed that the use of the product as a component of the marketing matrix acted as an effective tool in determining consumer decision-making in purchasing at the restaurant. The suitability of products based on behavioral segmentation was also found as an effective strategy in enhancing geographical segmentation.
The effect of branding and segmentation was also investigated in relation to the attitudes of the consumers who visit the restaurant irregularly. For an accurate arithmetic average, customers’ ratings of the restaurant were a principal player in attracting those irregular customers. Therefore, it is suggested that the creation of strong relationships between consumers and the restaurant act a key factor in creating appeal. Geographical segmentation was hard to evaluate since primary data was only collected from within the United States. However, from the data analyzed from the literature review, it was evident that the geographical segmentation plays a significant role in creating the company’s brand name. Products tailored to suit the needs of the people within a unique geography. This further attracts consumers since they prefer a restaurant where their needs are prioritized.
Respondents’ concerns regarding the restaurant’s products and information accompanied were also analyzed. The level of participation in reviewing the transparency of information disclosed regarding the products was found to be high. This implies that the participants agree with the reliability of the restaurant in offering reliable information about the ingredients in their menu. Therefore, it can be concluded that the internationality, reliability and popularity of the company is enhanced by truthfulness of the company towards its customers. Offering reliable information significantly contributes to the creation of brand loyalty.
Many people around the globe have turned to fast-foods because of the limited time they have. Many people prefer take-outs to cooking at home. For those who prefer take-out, deciding on which restaurant to purchase from should not be problematic. This is because, from reviewing a restaurant’s strategies, a consumer can determine the best choice that suits their needs. On the other hand, because of stiff competition, restaurants should come with strategies that attract customers. Strategies involved are usually incorporated in the restaurant’s marketing mix. Restaurant’s, just like any other business, can use product, promotion, pricing or place for the attraction of customers. Creation of a marketing strategy is the most essential thing that a company should use for the attraction of consumers. Many restaurants have employed the 4Ps to maintain their competitive edge or increase their market share. A review and analysis of data concerning McDonald’s shed light to the application of the aforementioned strategies in enhancing customer appeal.
An analysis of the knowledge acquired from the study on McDonald’s leads to a number of conclusions. First, it is evident that the depth (recognition/awareness) of a brand name drives customer appeal to products. Consequently, branding is essential for McDonald’s since it creates market differentiation that sets the company apart from its competitors. The company uses different strategies in creating its brand name. As stated before, branding and segmentation significantly rely upon the marketing matrix (O’Guinn et al., 2012). The company relies significantly on product, pricing and place in creating brand loyalty. From the analysis of the information acquired, it is evident that the restaurant has been improving its products to suit the needs of the consumers. Of particular interest is the health benefits of the foods served. The restaurant has been seeking to offer healthy foods in this health-conscious age.
A review of consumers’ comments concerning the restaurant suggests that the company has rediscovered its position after its slump in the 90s. Creation of a strong brand requires close association with the customers (Riesenbeck & Perry, 2009). The company rediscovered its dedication to customers. Dedication to customer needs creates a value proposition that enhances the growth of the brand. This dedication is observable from the company’s geographical and behavioral segmentation. The company is dedicated to creating a different experience through serving products that suit the lifestyles and particularly religions of its target market. As observed in the literature review, the company has been developing its menu and tailoring it to suit the individual interests of the target market. Geographical and behavioral segmentation has been a principal factor in attracting consumers and creating a value proposition for them. Despite the tough times between 2008 and 2011, McDonald has achieved incredible success in attracting and maintaining consumers.
Consideration of consumer preferences has been paramount to the maintenance of its customers thus its success. From the literature review, the company engaged in a new plan dubbed “Plan to Win”, which focused on customers. This rebranding strategy acts as evidence that the company was no longer satisfied with its orientation. Strategic rebranding is essential for the overall success of the company. This is because it places the company at a high competitive level.
Exploration of the findings sheds significant light in the quest of understanding a company’s success in relation to positioning. Positioning of the company is paramount in creating its differentiation. Consequently, differentiation creates a competitive advantage for the company. The positioning of McDonald’s has created significant differentiation in the fast-food industry. On this note, the company’s marketing strategy also comes to play. As noted by Zentes et al. (2011), a company can offer significant customer value (value proposition) through charging low prices or providing justification for high prices. For McDonald’s, pricing is highly essential n determining its positioning within the market. From the above analysis, consumers feel that company offers competitive prices that suit their budgets. On the other hand, differentiation entails distinguishing a company’s market from its competitors through the creation of value to consumers. Consequently, it is evident that McDonald has created an effective differentiation to cater to the needs of its customers. Market segmentation strategy used by the company has been a principal factor in determining and shaping McDonald’s differentiation. Geographical segmentation has differentiated the company in that it offers products that create value for the customers.
The study has explored McDonald’s in terms of market segmentation, positioning and branding. The principal aim of the study was to test the factors that have led to success of the company. A number of questions answered through a scrupulous literature review and a survey-type research design guided the study. Several factors have been identified as being essential in the maintenance of the company’s success and competitive edge. These strategies consist the marketing strategy of the company. These marketing strategies are essential in shaping the company’s success. McDonald’s significantly employs positioning, branding and segmentation for the attraction of new customers. Connections created through the strategies help maintain the company’s competitive edge. From the findings, it can be concluded that the company’s success has been achieved through innovations in the marketing strategy. Regular rebranding, appropriate segmentation and wise positioning have been the principal factors that have maintained success. Additionally, the introduction of new strategies such as two-way drive-through has been incorporated in the creation of more consumer experiences. The creation of these consumer experiences aids in enhancing a brand name, increasing consumer loyalty and attracting consumers from other related restaurants.
From this study, several recommendations can be made. First, the company should not consider unique positioning as the only factor that can drive sustainable competitive advantage. The company should also consider its tradeoffs. The company should consider a change of activities to speed up operations and spend less time on each product. The company should also embrace its limitations. This will ensure that the company remains value oriented in its serves and products. Additional, should utilize the marketing mix maximally to ensure that it targets a broader spectrum of consumers than it already has. The company utilizes product, pricing and place as the principal strategies of the 4ps of the marketing mix. The company should increase its use of promotions to attract more clients.
The company should also increase its monitoring for consumer opinions regarding its products. The company can create monitoring platforms for online eWOM (electronic word-of-mouth0 to understand it is market positioning and consumer perceptions. Through this, the company can improve its products further to suit the needs of all the target markets. Additionally, reacting to consumer feedback should be enhanced. As noted, the company strives at maintaining connections with clients in order to serve them better. Reacting to consumer feedback regarding products and the proposed improvements to the products creates a positive image that may attract other consumers. Reacting to feedback will also improve the brands personality and image.
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