McDonald's 4 P's of Marketing Analysis

McDonald’s Corporation since its start in 1955 has remained consistently as well known brand name worldwide. In order to achieve this status the company has used marketing strategies that have covered every aspect of the business and social world. From advertising and competitors to public relations and charity, McDonald’s has a goal and for what they want to achieve and has found ways of achieving those goals. Throughout this paper you will find descriptions of how McDonald’s used the four P’s of marketing in order to create a successful and well known worldwide company.

The four P’s of marketing include price, product, promotion and place. Marketing strategies are created through a process of conducting research, which provides the information for deciding the correct product/service, appropriate pricing structures, and the effective placement and promotion for establishing the proper position in the marketplace for achieving optimal return on investment. (investopedia.com) The marketing strategies that have been created through this research by McDonald’s Corporation have served them well ever since they opened their doors in 1955. The founder of McDonald’s Corporation, Ray Kroc, started the company with the mindset of expanding his business by using franchising. Since 1955, McDonald’s has become one of the most valuable brand names in the world. (Rowley, 2004)

Expanding the corporation globally is the marketing strategy that has allowed McDonald’s to become one of the world’s largest fast food retailers. In 1958, owner Ray Kroc made a statement, “The basis for our entire business is that we are ethical, truthful and dependable.” (McDonalds.com, 2010) The McDonald’s mission statement lists the four P’s of marketing as the basics of providing an exceptional customer experience.

The first of the four P’s is price. “McDonald’s overall pricing objective is to increase market share.” (Vignali, 2004) With the original research that was done to create a successful marketing strategy, McDonald’s Corporation researched the demand, competitor’s position in the market and the cost of creating the product and created a price that will create a customer demand. When the recession hit, a vast majority of businesses began to lose customers and in return income. McDonald’s was one of the few that cashed in on the recession by creating a value menu. The value menu, which features select items sold for one dollar each, has helped McDonald’s bring in customers consistently and this steady income has helped increased market share.

The second of the four P’s is product. When McDonald’s first opened in 1955, they were the first business to provide burgers, fries and milk shakes in a convenient family dining atmosphere. The competitors in the area provided no competition and McDonald’s sold its one hundred millionth hamburger in 1958. As time went on and technology advanced, the market became more competitive and a healthy lifestyle trend began to unfold in society. But even with all this change, McDonald’s kept to their philosophy, providing quality food and a quality service in a fast and easy environment and with this philosophy they maintained their place in the market. Two years after their tenth anniversary in 1965, McDonald’s began opening operations in Puerto Rico and Canada and currently they now have operations in one hundred and eighteen countries, including China, Japan, UK and Australia. (Mcdonalds.com, 2010) Each country has their own unique menu items, but a few of the classics are on every menu worldwide. These include the Big Mac, Quarter Pounder, French Fries and Happy Meal.

When Starbucks began offering coffee and a breakfast sandwich combo, it provided competition to McDonald’s already well known and loved breakfast menu. McDonald’s response to this competition was to create a new line of products called the McCafe. The McCafe was a premium coffee beverage that came hot, cold or blended and in a variety of flavors at a reasonable price.

The third of the four P’s is promotion. There are four ways to promote a product in the world of marketing; advertising, direct marketing, sales promotions and public relations. Advertising is used worldwide and usually involves the use of a celebrity praising the quality, value and affordability of the product. McDonald’s advertising is different in each of the one hundred and eighteen countries they have locations in. To date, McDonald’s has used twenty three different slogans in US advertising and a few other slogans in other countries worldwide. Television, radio and newspaper are not the only ways in which McDonald’s advertises their product. They have begun to use billboards and sponsoring sporting events such as the Olympics. But even with all these extra advertising connections, television has been the key advertising strategy for McDonald’s. Direct marketing is most commonly achieved by the use of websites. McDonald’s website provides detailed information about menu items, company policies and the company story. The information that is provided to the viewer allows them to get a better understanding at how McDonald’s became what it is today. Sales promotions are an important key in any marketing strategy. The most common sales promotion that McDonald’s run is their Happy Meal. The food content has remained the same over the years, but the toy changes all the time. The toy that comes in the Happy Meal usually corresponds to a movie or event that popular at that time. The current Happy Meal includes toys that are themed to DreamWorks’ Megamind movie. Public relations are a very important aspect to McDonald’s. Their website alone provides information for a variety of people. There is an entire section on the website dedicated to students who need information for writing term papers. The website even provides a place for customers to provide feedback for the company. McDonald’s feeds of this feedback and uses it to help maintain their quality service. In Beijing, McDonald’s hires individuals to be public relation agents in the community and provide information and receive feedback to be given back to corporate headquarters. Beyond their website, McDonald’s is well known for their contribution to the community. The Ronald McDonald House was created in many communities to help children and their families with special needs. A study conducted by a program called A Cause that Counts in 2009 states,

Research shows that 92% of Americans have a more positive image of companies that support a cause. And, 87% of Americans are likely to switch brands, when price and quality are equal, to support a cause. These trends are consistent around the globe.

In 1977, McDonald’s sponsored a High School basketball team and gave them the opportunity to play an exhibition game against the Washington Nationals. McDonald’s has also been a proud sponsor of the Olympics for many years, donating money to help maintain the quality of the event.

The final P of the four P’s is place. Place mainly consists of the company’s distribution channel. This marketing strategy is important, so that the company can make sure that their product is available at the right place, at the right time and with the right quantity. Nearly 50% of Americans are within three miles of a McDonald’s drive thru and good majority of those are located either near large housing developments or schools. Each McDonald’s provides their own unique experience for the both the children and the adults. Every McDonald’s includes a children’s play area, which usually includes a slide and various other playground equipment for the children to play on. For the adults, McDonald’s has started to offer an internet facility at select locations. These allow the adults to access the internet on their laptops while their children are playing in the kid zone.

Using these marketing strategies and maintaining the goal of providing quality service and food in an inviting environment at a fast and easy pace, will allow McDonald’s to remain on top of the market of fast food retailers. Their environments and prices will continue to have people saying, “I’m Loving It.”